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A recent study from The Search Party concluded that 58 per cent of employers find candidates lack skills necessary for the role and 40 per cent say they get poor resumes. With nearly 80 per cent of permanent roles in Canada still filled by the slow, ineffective channel of job boards and ads, this comes as no surprise.
When it comes to recruitment, a lot of the practices in place a decade ago are still in play today. That would be fine if recruitment was an effective, cost-efficient, accurate and quick process, but it is not.
According to the same research, the average cost of recruiting a new hire can run up to 30 per cent of an annual salary and take three to six months. That job is often filled with someone not right for the job – because, in this fast-paced, dynamic business environment, who has time to wait for the right candidate?
By 2025, the McKinsey Global Institute (MGI) calculates online talent platforms could add $2.7 trillion, or 2 per cent, to global GDP and increase employment by 72 million full-time-equivalent positions. This is staggering. Up to 540 million individuals would benefit, and as many as 230 million could shorten search times between jobs, shrinking the length of unemployment.
Digital technologies are having a profound impact across the economy. Look at Uber and Airbnb to see how transformative technology has been to a wide range of industries. Why is it taking recruitment so long to catch up when the solution is staring us in the face?
The beauty of the marketplace model is that highly skilled recruiters still get to leverage their skills and experience to screen candidates, in a way that is inexpensive for the employer yet profitable for the recruiter. It addresses both the candidate quality problem, and the broader issues of time and quality of hires that are experienced the world over.
Just like Uber revolutionized the transport industry, this similar approach to hiring is what will give recruitment a boost. Wholesale evolution leading to a faster (reducing hiring time to 10 days), cheaper (decreasing the average cost to hire to 8 per cent), more reliable mechanism for hiring will come by:
- Embracing marketplace economics
- Leveraging the power of data science and machine learning (systems that can make sense of vast volumes of data that were impossible until only recently) to quickly and easily identify the best candidates for specific jobs.
The role and value of technology is to make it easier to define and identify the perfect job candidate. To do this, you need a gigantic pool of highly detailed and rich candidate information and cutting-edge search technologies. Short-listing needs to be quick and easy, and the quickest way to then get a candidate to interview is to use a skilled professional who has a pre-existing relationship. Let them make the call. Everyone selected for interview should be pre-screened for interest, capability and excitement so that you decide based on cultural fit – a job best left for humans.
If you were able to always interview people who could do the job and wanted to do the job, and you could hire them within 10 days, then the productivity of your organization would dramatically increase. This is where the 2.7 trillion dollar GDP growth comes from. It's a paradigm shift of greater magnitude than the industrial revolution.
The productivity of a great candidate far outweighs that of an average one – they're worth their weight in gold. Think what you could do with the time saved by hiring the right people the first time: be more productive, profitable, donate it to charity, save the world.
Every innovation will be judged on its ability to improve upon the previous models. The time is now for businesses to embrace the potential for a revolution in recruitment to make hiring better, faster, easier and cheaper.
Ben Hutt is CEO of online recruitment marketplace The Search Party