Burgeoning presence of social media, digital marketing and Big Data has redefined recruiting norms across industries. Hence, organizations are deploying multiple methods to attract and engage with active and passive candidates. Over 70 per cent of organizations indicate that there will be a rise in hiring volume. Given the dynamic talent supply, it’s important to identify prevalent hiring practices and understand emerging imperatives for talent acquisition leaders. More than 60 per cent of the CEOs consider people issues as their top business challenge, impacting the organizations’ ability to succeed. So, it was no surprise that attracting the right talent at the right speed emerged as amongst the Top 5 challenges that Indian organizations face. However, 93 per cent of leaders believe they are not doing enough to address the gap. In the coming year, organizations may need to refine their hiring practices to best answer scalability, predictability and talent screening challenges.

These are some of the insights from the Aon Hewitt Study on ‘Decoding Hiring Trends in India 2015’, which captures some of the latest recruitment trends. The aim of the research was to capture some of the key themes that are driving changes in the talent acquisition landscape in India and uncover prevalent hiring practices. Aon Hewitt surveyed 95 organizations across 14 industries to identify emerginghiring trends for 2015. The survey respondents are talent acquisition leaders who work in the Corporate HR department are part of the recruiting team and spend more than 50 per cent of their time recruiting talent for the respective organizations. Leadership interviews were also conducted with talent acquisition and HR leaders of some best-in-class organizations.

While India has the second largest and youngest workforce in the world with a median age of 25, only 0.01 per cent of the population is skilled and qualifies as employable. While businesses battle the challenge of attracting and retaining key talent, recruitment teams battle the dynamic imperative of building robust talent pipeline to optimize efficiency. Further, increasingly identifying the right talent and ensuring business outcomes are also being considered as effective measures for recruitment teams. In its study, Aon Hewitt identified three pillars of recruitment: Hiring Outlook, Hiring Practices & Hiring Metrics. Let us look at each of them in detail.

The ground situation

There is an upward swing in hiring. More than 70 per cent organizations propose to increase hiring across levels, thanks to a stable political environment and macro-economic conditions. However, half the companies are cautious about hiring as majority of them are currently filling up entry-level positions. About 66 per cent will be filled for growth hiring. The lowest backfilling is reported at mid and senior levels at 40 per cent. At Biocon, planning starts mid-year to identify open requisitions. Backfilling is tracked on the basis of approval from business for the next year and subsequently hiring volumes are defined. Today, most of the organizations structure talent acquisition teams to address end-to-end hiring. More than half the companies surveyed have dedicated campus recruitment teams and IT companies are increasingly looking at RPO. Cognizant has a dedicated sourcing team, which helps in hiring across horizontals & verticals and addresses different levels of hiring needs and manage scalability issues. There are separate teams for hiring niche skills, leadership and critical talent hiring.

The increased use of social media has prompted more than 60 per cent of companies to upscale the employer branding budget to stand out as an employer of choice. Cognizant has two parameters for deciding the budget allocation—Source and Attract Strategy. Increased budget allocation is done on components that optimize quality and quantity of active and passive talent. Nearly half the organizations report learning opportunities besides compensation as key value propositions to attract key talent. According to Biocon, brand pull has a good impact on hiring, maintaining talent supply and increasing direct applications.

Organizations generally use a mix of four to five sourcing channels in order to access a diverse and varied talent pool. For entry-level and junior-level hiring, online job portals do the job, while recruitment firms are the best source for senior level hiring. However, organizations are yet to leverage the full extent of social media for hiring as the Study shows that less than 15 per cent of companies source more than 50 per cent of talent through social media. Companies like Hindustan Unilever Limited have found referrals to be the most optimal hiring channel as they provide optimal quantity and quality. Many companies don’t look at quality of hire as a ROI metric and this needs to change.

Companies measure quality of hire through perception-based measures (manager feedback or 180-day performance) to track effectiveness of selection process. Functional interviews and background checks are predominant across levels in various companies. While aptitude and skill-based assessments are used to hire for entry-level positions, for senior positions, it is culture and competency fitment. For example, SAP has multiple selection rounds that assess candidates on key functional skills and leadership behaviors. While technical assessments are conducted for junior levels, psychometric assessments are conducted to identify culture and competency fitment.

The Study shows that holistic assessment of candidate performance across stages is missing and there is a need to look at job fit and assessment fit across levels. There is also scope to redefine the talent acquisition cost as there is a predominant focus on efficiency metrics rather than effectiveness metrics. The Cost per Hire definition is fragmented across organizations and it is tracked by activities and not by opportunity cost. However, there is still a mismatch in the critical skills identified by the recruitment and talent development teams. Talent development and retention are top priorities for business leaders in India Inc, but significantly there is limited importance on talent development. There is limited alignment in key skills that recruitment teams look forward to in leaders and key skills that talent development teams demand in leaders.

In the next section, we discuss the key insights across specific industries through aspects like outlook, practices and metrics.

Automotive and Auto Components

The sector is likely to witness a rise in hiring numbers, with maximum hiring at the junior level positions. Auto companies don’t have a dedicated team for campus hiring and at least 70 per cent of the organizations structure their TA teams by business units. Majority of the organizations (60 per cent) cite learning opportunity as the key value proposition to attract niche skills. Internal career growth has become a key focus area as growing talent internally is a key trend at senior levels. Companies in the auto sector use a mix of campus hiring (85 per cent), online job portals (53 per cent) and recruitment firms (53 per cent). This is followed by functional interviews, competency-based interviews and background checks. Time to hire, time to offer and offer to join percentage is the most important hiring metrics. Only 17 per cent of organizations track ‘Quality of Hire’ by lag indicators such as ‘early attrition’ and ‘manager feedback’ at the end of 180 days. Lead indicators like performance on selection assessments as well as feedback from interviewers is tracked to identify candidate quality. While companies report ROI back to business, more than 70 per cent organizations lack objective and standard measures to track effectiveness.

Some of the imperatives that have emerged through the Study are the following:

• Structuring talent acquisition teams across businesses and by levels will break silos and increase effectiveness

• Tracking ROI on sourcing channels and by levels is a missing data point on hiring effectiveness

• Including diversity as a hiring metric will enable diversification in the talent

• Adapting talent sourcing methods (online assessments, applicant tracking systems) to cater to diverse talent pool will improve hiring effectiveness

Manufacturing

Nearly 64 per cent of the manufacturing organizations are planning to increase hiring this year. In contrast to the auto sector, majority of the hiring (47 per cent) will be reported at the mid-level. Around a quarter of the organizations (27 per cent) also report structuring their talent acquisition teams by hiring stages. Companies have a formal manpower planning process, where they track filled positions on a monthly basis for growth hiring and backfilling. Such companies outsource background screening and sourcing. Besides learning opportunities, compensation packages are the predominant value propositions to attract niche skills in the industry. Online job portals and direct sourcing are the most preferred sourcing channels. Highest selection ratio is reported for employee referrals across levels (90 per cent). While functional interviews and background checks are used, nearly 67 per cent of the organizations use competency assessments and culture fitment as important selection filters for hiring at senior and mid-levels. The most important hiring metrics that are tracked are Time to Offer, Performance rating and Time to hire. Tracking ROI on sourcing channels by levels, including diversity as a hiring metric, and integrating data from multiple sources and using data-driven approach to track performance will lead to demonstrated business outcomes.

FMCG/FMCD

Only 36 per cent of organizations are planning to increase hiring in 2015, whereas majority is reporting the hiring to remain the same. In the FMCG sector, less than 10 per cent of the senior positions are open for recruitment as majority of them are filled internally. Functional skills and domain knowledge for specialist roles are reported to be the most difficult skills to attract across levels. Nearly 83 per cent of organizations have dedicated TA teams for each business. While FMCG companies use a mix of online job portals and employee referrals as the most preferred sourcing channel across levels; only11 per cent organizations report more than 90 per cent selection ratio for both these channels. Just like manufacturing companies, organizations in this sector will fill up senior positions internally. Time to hire, cost per hire and time to offer is ranked as the most important hiring metrics. Increase in social media spend emerges as a priority for budget allocation in 2015 as more than half the organizations in the sector are leveraging the same for sourcing and attracting active and passive talent.

Hi-Tech & IT

Nearly half the organizations in the sector (45 per cent) are planning to increase hiring in 2015, while almost one-third of organizations are not planning to increase their hiring targets. The companies are targeting the junior-level positions the most, with close to 45 per cent to be filled through campus hiring by visiting an average of 20 institutes. Interestingly, however, more than 70 per cent of organizations do not have a dedicated team for campus hiring. While sourcing and screening are in-house activities, background checks are outsourced. Organizations in the IT sector are looking at RPO for budget allocation next year across all levels. Employee referrals (71 per cent) and online job portals (53 per cent) are the most preferred sourcing channels. However, only 7 per cent of organizations report more than 90 per cent selection ratio for both these channels. About 65 per cent report their hiring methods to be predictive of performance on the job.

Pharmaceutical

A massive 83 per cent of organizations report that they will increase hiring in 2015, with companies looking to fill in at least 82 per cent of the junior positions. Less than 15 per cent of the position will be filled at the mid-level, while less than 10 per cent will be looked at for senior positions. Majority of the senior positions will be filled internally. Organizations in the pharma sector are looking to increase budget allocation on assessments, social media and technology in the coming year. Online job portals and employee referrals are the most preferred sourcing channels. However, only 25 per cent of the organizations report more than 90 per cent selection ratio for both these channels. The selections tools that these organizations employ are functional interviews, psychometric assessments, competency-based assessments and background checks. Time to hire, cost per hire and time to offer is the most important hiring metrics.

In conclusion, in the coming year, organizations may need to refine their hiring practices to answer scalability predictability and talent screening challenges.