Organizations need to upgrade their overall recruiting strategies by applying powerful talent data to bring new precision to their employment branding efforts and selection methods
Only 1 in 6 employers in India say that graduates have the skills they are looking for. However, this is a problem that also worries other countries such as the US, UK, Canada and China, according to a 2014 study by a research major. In the UK, 7 in 10 employers think that students need to do more to prepare themselves for work; and in the US, only 1 in 6 hiring managers think students have the required skills and knowledge. Across the Middle East, HR professionals feel that graduate hires lack soft skills, particularly communication and teamwork. And in Canada, 1 in 4 graduate positions remain unfilled. Data shows that organizations across the world continue to struggle to fill their graduate vacancies. While in theory there is a lot more talent to choose from, with more students graduating from university than ever before, businesses are struggling to find the right people. Hence, there is a fight for talent.
The challenges faced
Despite rising numbers of students graduating and a borderless jobs market, employers continue to report skills shortages in young people. At the same time, workplace dynamics are changing as the balance of demographics shifts. As Gen-Y and Millennials make up a considerable proportion of the workforce, companies need to formulate new talent strategies.
Organizations face stiff competition to attract and retain top talent in this complex work environment, and need to overcome three major challenges if they want to future-proof their success:
- Managing high volumes of applications: The need for an organization to identify the right graduates before its competitor does is critical. According to the data by the research major , a vast majority of graduate recruiters received 50 per cent more applications in 2015 compared to the previous year. Companies therefore require an objective, scalable and candidate-friendly recruiting process. The volume of applications needs to be managed efficiently without compromising the quality of hire, and candidates need to have a positive experience of the brand throughout.
- Getting the right graduate fit: 1 in 5 graduates admit to applying for jobs that do not interest them but do so just to secure their first job, and many regret the decision once they join the post. Subsequently, the data shows that 25 per cent of graduate hires have no intention of staying longer than one year with their first employer. To reduce early attrition, it is essential for organizations to provide candidates with an insight into the organizational culture and expose them to the realities of the role they are applying for in order to help them in determining whether it is the right position for them or not.
- Realizing potential: While organizations concentrate on identifying candidates with the ability to succeed in the role, it is just as critical for them to understand each individual’s strengths and areas of development. Key to improving retention, employers need to provide graduates with opportunities that will allow them to learn and grow. In long term, this will make performance management and development programs more effective and help in building a strong pipeline of talent to meet future business objectives.
Are we looking for the right things in graduates?
The research firm's global analysis reveals that organizations are perpetuating talent shortages by recruiting graduates based on their idea of the perfect candidate. Not only do they expect graduates to have workplace experience and proven technical skills, they also assume that the best candidates will have a glowing academic report. The chances of finding the notional top graduate talent are 1 in 15, which goes some way in explaining the number of many unfilled graduate vacancies.
The findings suggest that employers do not have a clear understanding of the skills and talent they need, which means job opportunities are often misrepresented, and are misleading for inexperienced jobseekers.
The National Association of Colleges & Employers (NACE) in the US conducted an extensive survey in 2013 to look at the Top 10 skills and qualities that employers value the most in graduate talent.
They are the:
- Ability to verbally communicate with persons inside and outside the organization
- Ability to work in a team structure
- Ability to make decisions and solve problems
- Ability to plan, organize and prioritize work
- Ability to obtain and process information
- Ability to analyze quantitative data
- Technical knowledge related to the job
- Proficiency with computer software programs
- Ability to create and/or edit written reports
- Ability to sell or influence others
Understanding the importance of measuring the ability and potential of graduates, the research organisation built its Employability Model to enable recruiters to gain a more holistic view of graduates capabilities – the hard (execute) and soft (engage) skills that underpin performance.
By using objective assessments, businesses have a more accurate way of determining whether a graduate has the rounded skills, behaviors and competencies required to be successful in a job. The data captured can be used to identify whether an individual has the potential to succeed in more senior roles; and can also be leveraged to pinpoint the skills and experience that need to be developed throughout their careers if they’re to flourish in future management, leadership and technical specialist roles.
Identifying Top Performing Graduates
The research major mapped data from 6.6 million assessments for supervisory and managerial roles across 29 organisations in Asia, Africa and the Middle East, as well as the UK and the US, to test the model and create a set of reliable predictive indicators.
This two-by-two segmentation of execution and engagement skills demonstrates the correlations between employability and performance.
Compared to those in the lower left quadrant, those graduates ranking higher on both the potential to execute and to engage are 4.4 times more likely to be rated as top performers. Graduates that rank higher on the potential to execute but lower on the potential to engage are 2.9 times more likely to be top performers, while those higher on the potential to engage but lower on the potential to execute are 2.1 times more likely to be top performing employees.
In other words, those strong in several but not all the aspects of our employability model are still likely to be among an organization’s most effective performers, and it is the balance of strengths that a prospective employee offers that is important.
The model allows companies to identify those young people that have the potential to do a good job, even if they don’t have those skills on day one.
Reframing Graduate Recruitment Strategies
If companies are to gain a full return from investing in graduate recruitment, they need to understand the potential of the graduates they attract and hire. Once graduates are hired, this intelligence can be applied to making the performance management and development programmes more effective. It will also help organizations understand whether their current approach to graduate recruitment is likely to pay off and what they need to do to improve its effectiveness and investment return.Drawing on the analytics database of 197,335 recent graduates across 32 countries and 17 industry sectors, the research firm calibrated this data against the 6.6 million employees worldwide to identify three broad graduate recruitment strategies based on the employability model.
- A buy strategy – Where employers compete for graduates with strong potential across all of the talents described by the employability model.
- A buy-and-build strategy – Where employers acquire graduates with strengths across the employability model but recognize that improving overall graduate bench strength will need an ongoing investment in their development. This strategy requires clarity on where graduate hires have strengths and where to focus any learning and development spends.
- A build strategy – Where employers may be satisfying the immediate need for core knowledge and skills but are acquiring graduate talent that will need development in the potential to both execute and engage effectively. This approach will ensure that they have a pipeline of talent to meet their future needs for specialists, managers and leaders.
These findings help explain why many organizations are struggling to achieve their aspirations for graduate recruitment. The odds for the success of a buy strategy are substantially lower than for other strategies. While those higher on the metrics for executing and engaging are more likely to be the organization’s top performers, the odds of finding this level of graduate talent is 15 times lower than for the level of talent that satisfies a build strategy.
Every organization needs to decide the extent to which its finite talent investment capital should be applied in a pre-hire buy strategy, where it will face fierce competition, or in the post-hire development of graduate talent. Data suggests that a more sustainable position for most organizations is a buy-and-build strategy. Combining both quadrants of the two-by-two segmentation relating to this strategy, the odds of finding the required graduate talent are 1 to 2 or 7.5 times more likely than for a buy strategy.
The success of a buy-and-build strategy depends on organizations knowing the specific strengths of the graduate talent they acquire and the specific areas where they need to invest. Its success also depends on graduate recruiters having the right intelligence on the talent markets in which they compete so they can advise their organizations on the buy-and-build investments required pre- and post-hire.
Putting these strategies in to action, companies can stop going after just the illusive 1 in 15 chance, but confidently approach the off-diagonals as well. However, the buck does not stop here. Recruitment will have to link hands with the learning and development function to come a full circle. With a pre-decided strategy, companies can predict the skills that an individual employee needs rather than a cookie cutter training approach and can follow a targeted skill enhancement approach that will work towards a customised Employee Value Proposition to make every hire a successful one. It will also help companies as they approach different sectors and geographies to strategically plan their talent acquisition.
Will a customized EVP work?
Not only do businesses need to be clearer about the skills they are looking for, they also need to give jobseekers a more accurate view of what the job entails and the unique offerings – the rewards and benefits – that comprise their Employment Value Proposition (EVP).
With the vast majority of graduates claiming they do not understand the role they’re applying for and 1 in 4 receiving at least three job offers, organizations need to help graduates make the decision to work for them.
To supplement the employability model and the three recruitment strategies, buy, buy-and- build and build, a sharpened focus is needed on the motivational factors that link to each of the different quadrants and model EVP.
Most firms presume that graduates are lured by the salaries and material rewards. However, according data available, today’s graduates are instead motivated by opportunities to develop and grow, demonstrate the talents they have and progress in the organization. Job applicants look for companies that have a strong EVP. For them, it defines what an employer expects from its employees and what it provides in return. This is vital for influencing candidates’ decisions to want to work for the business and to help secure the right match between the candidate and the employer.
Motivational Factors by Key Graduate Segments
The research shows that organizations with a weaker EVP pay a 21 per cent higher premium to acquire new employees. Those organizations with a stronger EVP are likely to see higher levels of engagement in their workforce. If there is tight alignment between the brand, the EVP and what job applicants are looking, it will have a big impact on the downstream costs of retaining graduate talent once hired.
However, a key point to note is that if the EVP fails to relate to what motivates today’s graduates or if this is not communicated effectively, whether it’s the attraction proposition or the actual candidate experience, the organization will struggle to attract the strongest talent and subsequently retain it. These companies are also likely to pay a higher premium for this talent as well. The same research shows that for every 10 per cent increase in the commitment of an employee, there is 6 per cent increase in the discretionary effort they invest in their work, which results in a 2 per cent increase in overall productivity.
What should the HR do?
Workforce planning is a high priority for HR and business leaders globally. This reflects the escalating importance of using data to forecast future staffing needs. While majority of CEOs report a greater need for talent insight to help inform decision-making, 15 per cent senior leaders see their recruitment function as providing the proactive advice they need to help shape business strategy.
The pressure to ensure that the right people, with the right skills are in place at the right time is intensifying – and business leaders need greater support and reliable data from HR to help them plan their talent strategy. Big data or talent intelligence is the critical connector between people planning, investment and decisions to short- and long-term business outcomes.
The research also shows that companies are missing out on strong talent and wasting precious time and money on ineffective graduate programmes. Firms that want to see outsized returns need to upgrade their overall recruiting strategies by applying powerful talent data to bring new precision to their employment branding efforts and selection methods. This, combined with intelligence on what really motivates today’s graduates, is a powerful lever for driving more effective investment in graduate recruitment and development.
Transforming practices in this way will help employers break the cycle that could be fuelling today’s hypercompetitive landscape.