|
A Right Recruiting Newsletter, 2/2009
No matter whether the state of the economy, good or bad, many companies still need to hire talented people. Sometimes it’s to replace someone who left. Sometimes, it’s to upgrade a needed skill set in an organization. Sometimes, it’s actually due to growth. Don’t forget, there are always companies growing, irrespective of the general economy. In this Newsletter, we are going to explore the difficulties of hiring during a recession.
Yes, there are DIFFICULTIES of hiring during a recession. In my experience, there are more bad hires consummated during a recession than during a normal market. This may be counter-intuitive but I believe it’s true. Here is why.
But first, let’s define a bad hire. A bad hire is someone who does not last in a job or stay with a company for at least 2 years. Filling a job should go beyond getting someone to accept and start a position. They should stay in a job long enough to have an impact. They should stay because they can both do the job well and also enjoy the job.
Market Quantity and Quality
Let’s consider your universe of potential candidates - the people actively seeking a job during the time that you are trying to fill a job. Certainly there are more people out of work in a recession than in a normal economy, though as we’ve discussed in earlier Newsletters, not as many more skilled professional level employees as you might assume. However, part of this increase in quantity is balanced out by the lack of market participation by those gainfully employed. A shaky economy often keeps them on the sidelines. Many are not interested in hearing about better jobs because they either don’t believe anyone is hiring or they are too nervous to consider leaving a known situation for an unknown one. The increase in active candidates in a recession may not be as large as it appears. Each person who is laid off may be balanced out by an employed person staying put. It may not be a one-to-one relationship but increased layoffs are, to some degree, mitigated by retrenchment among those gainfully employed.
So, yes, the quantity of available candidates does increase during a recession but not as much as you might assume. How about the quality of available candidates? Many believe that companies use layoffs to get rid of deadwood and to eliminate weak links in their organization. In my experience, this is sometimes true. While a percentage of those laid-off are what I call, “serial layoffs”, most are not. Some are just in the wrong place at the wrong time. By “serial layoffs”, I mean those who seem to be downsized like clockwork every time the economy sputters. It’s eerie how certain resumes posted on Monster become early warning signals for the labor market. Honestly, for a minority of those on the market, it’s the same people and same story every few years. They are always the first to be shown the door. For most, however, it’s just a function of wrong place and time. Maybe they supported the wrong product or worked for the wrong manager in the wrong business unit. On balance, I do not think the quality of candidate on the market during a recession is better or worse than a normal market. I think the outer ends of the bell curve get stretched a little as some good people get caught in a numbers game and some marginal performers get kicked out the door, but the aggregate quality level is the same.
So, we have a few more people on the market during a recession and the quality of the candidate pool is the same. That should make hiring now slightly easier. It is. Remember, I didn’t say that it isn’t easier to fill a job now. It’s just harder to fill a job with someone who will stay more than two years. If you care about the longevity and stability of your staff, here’s the problem.
Candidate Behavior and Skill Enhancement
It’s candidate behavior during a recession that leads to bad hires. It’s like a game of musical deck chairs. No one wants to be the last one standing. The longer a candidate is out of work the more nervous and anxious they become. The severance and unemployment starts to run out. That leads to behavior that can deceive a hiring manager about two things. One, a candidate’s actual skills. Two, a candidate’s actual goals. Candidates become deceptive in a recession.
Accusing someone of intentionally lying is a serious charge. This is not a value judgment. People who do this are not satan. Most have simply been put in a bad spot. However, you have a business to run and decisions to make. Our purpose here is to help you protect yourself against making a decision that you will regret. Let’s start with the enhanced skill set or resume. For purposes of civility, let’s use the word enhanced rather than fictionalized.
I remember talking to a fellow a few years ago about a job we had advertised. It was a senior engineer job. The fellow in question called wanting some details about the job before he sent his resume. When I explained to him that it’s more efficient to send the resume to me first so that I can call him back with his background already in front of me, his response was interesting. He said,” I have 6 versions of my resume and I like to tailor the resume around the specific job. The more you tell me about the job, the more on-target my resume will be.” Hmmm. This was a machine design job that required knowledge of SolidWords and PLC-controlled machinery. To me, it appeared quite black and white. Maybe I was in a bad mood that day because I remember getting a little bit angry. I asked if he actually had SolidWorks experience and he said he had taken a course. I asked if he had 5 years of machine design experience and he said he worked with guys like that. Upon further questioning, he was a Maintenance Engineer who had SolidWorks in college and who had managed a work crew in a steel mill and installed machinery. His intention was to re-write the resume around the job in the hopes of getting an interview.
This happens more often than you would believe. I am fortunate because I have a large database. I would estimate that I already have old resumes from about 40% of the candidates who contact me anew. When I compare them to the old resume, almost 25% have changed a title, a skill or eliminated an employer in the newer resume. Some of these changes are harmless, like making a title Manufacturing Engineer instead of Project Engineer, but others are more profound. Maybe I am old-fashioned. I still think it’s wrong to not list a company where you were employed for 6 months during a period 2 years ago. Maybe I am old fashioned. I think it’s wrong to list Six-Sigma as a strong skill if you’ve only had a night-school course in Six-Sigma at a community college. But, each to his own. Be aware. Many candidates thinking that listing a buzzword is the same as actually having a skill.
Most of these misrepresentations show up in the interview so they don’t go very far anyway. However, they do suck up your time and they create static in your decision making process. As a good manager, no doubt you know how to conduct a thorough technical interview to avoid the most obvious of these scenarios. Before we move onto the second, trickier candidate enhancement technique built around shifting candidate career goals, there is another piece of legerdemain you should know about – the phantom reference. Most managers do references on people before hiring them. After a good interview, you ask a candidate for names/numbers of people with whom they have worked. Usually you want peers or managers. For gosh sakes, make sure you get the actual work number of the reference and not a cell phone. If you call a cell phone expecting to get the fellows ex-boss, how do you know you are not getting his brother-in-law pretending to be his ex-boss? I know that has occurred. Candidly, I am generally not a big believer in the value of references anyway but at least make sure that you know to whom you are speaking!
A good interview and careful reference process can go a long way towards solving the problem of the candidate who misrepresents his/her skills and accomplishments. That’s the easy part of the equation. The hard part is what’s locked in the candidate’s head - their goals and motivations. Here where the candidate can, with all sincerity, trick you because they trick themselves. This manifests itself in one of two ways, one innocent and one not so innocent.
Innocent Career Goal Shifting
Someone who is out of work can get nervous about their job prospects and career goals. Where they once saw themselves as a future CEO, they may now see themselves as a worker-bee content to work 9-5 in a mid-level staff job. It’s human nature to have your ambition match a realistic assessment of your prospects. If the media is blasting you with lousy info all day, it’s only natural to downgrade your expectations of your future prospects and become thankful for any job consideration. I see this all the time. For example, in December, I got a call from an ex-applicant who had been downsized unexpectently. I knew that he had a good background, having gotten him 2 or 3 interviews over the last 4 years. He was in his early 30’s and was the type of person I was sure would be a manager one day and maybe move beyond that. I was shocked when he started asking me about jobs on my web site that were $40,000/yr less than his most recent salary and two levels below his responsibility level. He’d been shaken by the layoff and lost confidence. Perhaps there was also some financial insecurity as well. Maybe a short-term need to maintain a paycheck was making things worse.
Maybe another recruiter would have fanned his fears in the hope of being able to convince him to take whatever job would appear next at any salary. A short-sighted manager or recruiter might have seen him as a quick answer to an unfilled job. As I saw things, this was a fellow who, in a normal market, was worth what he had been getting paid. He was not over-priced. He was someone who had a good future and who had just been sidetracked by situations. I was honest with him. I said that he was not right for the more junior jobs on my web site because he would be bored in a month. I also doubted that the company would even consider someone like him for a junior job. I reminded him that he had a good future and that layoffs happen to anyone. Bad markets are temporary and his options will return. A more appropriate strategy for paycheck maintenance in a downturn is a consulting or contract assignment until options improve.
Why did I say that? Because hiring him for a job beneath his skills would not have been a good hire. If you run across a candidate like that and decide to overhire for a job, remember one thing. By taking advantage of him you are guaranteeing that you will lose him when the market improves. Someone like me will call him 6 months or a year later with a job more suited to his salary history and experience level and gets him back on track. Then, you will have to refill the job a second time within a year. Unless you are absolutely convinced you can, over a short period of time, massage the job duties and salary of the position to more fully recognize this candidate’s experience; don’t hire a “bargain”. It does not work. An analysis of the resumes of hundreds of people hired during a downturn shows me that those who move backwards in salary and responsibility almost inevitably leave their jobs for better situations within two years. Bargains have a very short shelf life. In this instance, we have a candidate who basically undervalues their long-term worth in the market and, in doing so, convinces themselves and you that they have given up their long-term goals. Inevitably, those goals will return when the market does.
Not So Innocent Career Goal Shifting
Our example above was of a benign candidate who temporarily had his confidence shaken. There is a second type of candidate. This one is more manipulative and harder to spot. In this one, the candidate may have the appropriate skills and experience for the job you are filling. However, his subjective goals may not be in long-term alignment with the job or your company. This candidate will say anything to get the job but will leave as soon as possible. Let’s give a few examples, shall we?
I have a client that is a well run firm with a good culture. However, their products are not technically challenging. Frankly, they aren’t sexy. They don’t attract people who are motivated by technical challenge. They attract people who want to be a part of a good business. They were doing a lot of hiring in 2007 and 2008 in their engineering areas. Frankly, some of the people who we approached for them were quite dismissive of the company’s products. In fact, some were almost insulting. These were people whose experience was on high-tech exciting products and who valued that type of challenge. Of course, now it’s 2009 and some of those same people have been laid off. They need a job now and options are fewer. Of course, they are less picky about the products on which they work. However, in most cases, their values remain their values. In other words, unbeknownst to a manager, to these people designing a simple product is a step down. Frankly, for them it’s almost embarrassing. They will take a step backward, like the candidate we spoke of earlier, but it will be a temporary step back until other options appear. The difference is that the step back they will take is hidden from the manager. It’s not a quantifiable value like salary. It’s buried in their head and personality. They won’t share it with you when you interview them. You’ll think everything is hunky dory until they quit 6 months later because, after all, the product does not excite them. Jobs have intrinsic (money, benefits) and extrinsic (status, culture) compensation. Matching the extrinsic is just as important as matching the intrinsic. It’s just harder to do in a recession.
It’s harder to match the extrinsic compensation in a recession because candidates have more incentive to hide it from you. If Joe Smith is working he has no incentive to interview for or accept a job that does not meet his extrinsic goals. If he is not working, he has every incentive to hide those extrinsic goals UNTIL A BETTER JOB FOR HIM APPEARS. Once again, just because you filled a job, it does not mean you made a good hire. This is very important because these people can become infectious. They become complainers. If their extrinsic value includes a short commute and you are far from their home, they will complain and be late all the time. If their extrinsic value includes working on a specific ERP package and yours is not as sophisticated, they will always complain about how much better the other one is. If their extrinsic values include a private office, lenient time off or a specific title and you do not provide these, they will complain. Mind you, they will not volunteer this in the interview because, after all, they need a job. This will however, come up in their performance over time.
In a recession, when candidates are more motivated to lie to themselves and to you about their values, there is a burden on you to dig a little deeper. More open-ended questions are appropriate and multiple questions focusing on their likes and dislikes become more important. Have multiple people ask them similar questions and look for the consistency in their answers. If 3 people ask a candidate a variant of the question, “What did you most like about your prior job?” and you get 3 different answers, this is a very very bad sign. You need a little more sophistication when interviewing in a recession because an out-of-work candidate has no reason not to lie to you to get a paycheck.
Of course, this is all predicated on the premise that you have the type of staff and company that values employees who want a career track and who plan to contribute to the organization over years, not just months. If you have a short-term project and don’t care whether the person is there 2 years from now, that is a different assessment. However, if that is the culture in your company or department, I am not sure why you wouldn’t staff with contractors. That’s a whole different type of relationship, with less ambiguity involved.
So, in retrospect, be careful out there in the employment jungle. Don’t revel in the fact that everyone appears to want your job and work for you. Appearances can be deceiving and, a certain percentage of those you interview will have hidden motivations that can cause you problems down the road. Invest some time in those old-school questions like,” What do you want to be in 5 years?” Sometimes, the answers will be revealing.
Lastly, as ever, don’t forget Right Recruiting as an employment resource, both now and in the future. Thanks.
|
