There is a Great Divide in HR. It’s the often unaddressed gap between the decision to hire a candidate and that candidate’s first day on the job. This critical gap is soon going to lead to a huge divide between those organizations that succeed and those that don’t. HR is facing unprecedented challenges in 2015, and they will only get tougher if HR doesn’t address this piece of the hiring process.
We see five critical challenges facing HR in 2015. Some of these challenges aren’t new for HR; they have always had to find talent, reduce attrition and maximize retention, while handling compliance issues around regulations or legislation. However, there is unprecedented urgency to these issues due to changes in the economic climate, demographics of the workforce and new sweeping legislation on everything from immigration to the Affordable Care Act.
World War T: the War for Talent
It hasn’t been this hard to fill roles, especially for skilled workers, in a long, long time. According to an October 2014 SHRM report, 50 percent of organizations surveyed said that they had difficulty filling full-time positions in the last 12 months. Employers surveyed said their candidates lacked work experience or technical skills or had competing offers from other employers. The high tech industry has particular problems finding talent: 77 percent said that candidates didn’t have the right skills, and 64 percent faced competition from other employers. Unemployment is drastically down since the recession days, and job openings are up. Skilled workers are a scarce resource.
We are looking at a job-hopping workforce in a candidate-driven economy. There are no more active or passive candidates, just candidates. Mobile technology and social networks mean we are always on, all the time. Skilled workers will see opportunities every day on their smartphones and some will be lured away by better opportunities. The average Millennial stays just 2.3 years at a job, and recruiting and hiring costs are greater than ever. HR is looking at a very expensive revolving door of workers.
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The Millennial Tipping Point
We’ve been talking about the Millennials for years, but now they are here in full force. This year marks the first year that Millennials outnumber the Baby Boomers, who are now retiring at the rate of 10,000 a day. As HR knows, the hiring needs of this demographic are very different than those of the ones who came before them. They are digital natives – used to ordering coffee or a pizza on a smartphone. They have high expectations of technology. They want to be able to e-sign an offer letter, then send it back instantly. Fax and snail mail won’t work here.
This year brings an alphabet soup of new laws that HR has to track and navigate. The ACA, FLSA, EEOC, OSHA, OFCCP – these are just some of the things HR has to worry about. The administration of these things alone would consume all of an HR professional’s time. Add to that that employment lawsuits are on the rise – up 400% in just the last 20 years, with an average award of $490K – and HR can’t afford to make mistakes. And the good news for the economy is good news for the government as well. Hiring freezes are being lifted, and more enforcement agents being added. They are looking to collect fines from employers who don’t get it right.
Data Privacy and Security
This probably wasn’t even a concern 20 years ago. Now, employers need to make sure they are securing their employees’ Personal Identifiable Information (PII). Sony learned this the hard way in December 2014, when a data breach led to many class action lawsuits by employees and former employees. Some of the members of the suit hadn’t even worked for Sony since 2002 – but they still have a suit. The government isn’t immune here either – a data breach at the VA turned out to have expensive consequences. Home Depot and Target also had expensive breaches. Data security has to be a top priority for HR.
So how to meet these challenges? Some things HR can’t control – a demographic shift is beyond their reach. But they can change how they deal with those demographics. First, HR needs to start looking at the hiring experience they provide from the minute a decision is made to hire, until that new hire starts on day one. HR needs to engage candidates and new hires right from the start. A superior hiring experience will lead to engagement, which will impact retention. This is true for everyone, from hard-to-source talent to today’s Millennials. Mobile-friendly technology, paired with service and support, must be leveraged to handle administrative tasks, meet compliance hurdles and secure data. Offer letters and new hire forms should be sent electronically and securely, digitally signed, and sent back. Day one should be about meeting team members and getting to real work, not signing paperwork in a conference room.
By looking at and addressing the divide between the decision to hire and day one, HR can go a long way to meet the challenges of 2015.