Map of U.S. Unemployment (Photo credit: Wikipedia)
The U.S. Labor Department recently reported that there were currently 3.74 million job openings in the U.S. That’s the highest number of U.S. job openings since before the 2008 economic downturn. Historically, this many job openings suggest a pre-recession unemployment rate. Instead, the current unemployment rate is 8.1%, with 12.5 million Americans out of work. The huge gap between job openings and jobless numbers suggests something insidious and possibly structural: a talent crunch.
Unfortunately, one of the first cuts made during the current downturn was employer-sponsored formal education and concomitant tuition reimbursement programs. Nevertheless, even where employer-sponsored training is robust, there remains a seeming disconnect between the employees that companies seek and the employees they get.
Many governmental and non-governmental organizations have been summoned to solve the work readiness challenge. These organizations are attacking the talent crunch at the source by helping potential employees -- many without degrees, let alone the ability to competently read and write – gain in-demand skills via internships, community college intensives, and training programs.
But below the radar lurks a cost-beneficial solution that more immediately meets the needs of potential employers and employees, especially at the higher end of the salary scale. It is called software-as-a-service (SaaS) talent management because of how software is used to improve the efficiency, accuracy, and knowledge sharing throughout an organization’s talent management process.
A salient feature of this recruitment style is that it doesn’t require companies to scour the ends of the earth for the precise talent fit. In fact, the solution doesn’t start with software at all, but with a fundamental shift in hiring attitude. According to one SaaS talent management firm, Halogen Software, organizations of all types can start to solve their talent crunch by carefully examining, intimately knowing, and internally sharing their culture, vision and values, so that, from the get-go, they hire smart, emotionally intelligent, go-getters with a hunger for self-improvement and a commitment to the firm’s direction.
Human Resource Examiner calls this “Hiring to Deficiency”. Rather than obsessing over whether a candidate has the precise “skill sets” listed in a job description, employers instead focus on getting the candidate “up to speed.” By selecting candidates who, first and foremost, align with the company’s culture, it is less expensive, with higher ROI, when that company provides informal, on-the-job training for that hire in the specific skill sets required. This is especially true because candidates that precisely fit the job description often come with higher salary requirements.
Naturally, this goes against almost every employer instinct. After all, when you pore over a stack of resumes, you instinctively discard those lacking the right “experience,” “training” or “skills.” Say, for example, you are hiring an ad saleperson for a luxury magazine. You want to hire someone with significant magazine ad sales experience, right? Wrong. That sales clerk from Saks, with zero experience selling magazine advertising, might actually be a better fit. With a little hands-on skills training, he or she could end up being the better ad sales generator because he or she is a better values fit.
However, it’s not enough to hire to deficiency. It’s also important to be upfront with your hire about the talent management process. That is, corporations need to reveal the very guts of advancement, and the training tools, benchmarks, and goal-setting required to get to each plateau on the corporate ladder, and concomitant higher compensation. Moreover, HR staff must openly admit from the first interview that the employee will need to be “brought up to speed.” And company staff then need to actively partner in bringing that employee up to speed, and -- using talent management software -- track and encourage their learning progress. Naturally, for that to seamlessly happen, employees must buy in to the workforce education journey and their proactive role in their own self-actualization.
The need for enlightened talent management is empirically undeniable. In Deloitte's Talent Edge 2020 survey of 376 senior leaders at large global companies, only 17 percent reported that their organizations’ talent programs are “world class across the board,” while 83 percent believe significant improvements need to be made.
However, not just productivity is at play here. Courts continually find employers liable for errant employee behavior, even when such behavior can only be tangentially connected to an employer job mandate. This is why talent management software is critical in not only finding overlooked candidates coming from the outside, but, in the majority of cases, identifying strong candidates from within an organization whose behavior has already been battle-tested, who align with the company’s values and expectations, and who are, thus, less of a liability risk.
As a leading SaaS talent management concern, Halogen Software believes global companies can find the best talent and retain the best quality employees, while avoiding costly litigation, by allowing employees to fully participate in their own goal-setting and self-improvement. As Paul Loucks, president and CEO of Halogen, informed me, “All the development programs, activities and resources that an organization invests in for their people should support the goal of improving employee performance – especially improvement in key competencies that the organization wants to nurture to stay competitive. Whether the investment is tuition reimbursement for a degree, a three-day industry conference, or an online course in the corporate learning management system, the purpose is to create a development process between manager and employee that helps employees improve their performance.”
Loucks adds, "Organizations that have invested in employee development throughout the downturn are going to be at an advantage because they’ve shown their employees that the organization is committed to their career success and helping them grow within the organization. These companies won’t be faced by the same exodus of top talent during the economic recovery because their employees will be more engaged and focused on continuing to making their firms successful.”
We all know that training and motivation is key to high performance. However, most employees work best against clear metrics and self-generated goals. This is where the software-as-a-service component also comes into play. Says Renee Lytel, CFO of E.B. Horsman & Son. “In more challenging market conditions, having a developed and capable workforce becomes an even bigger asset. Talent management platforms that provide ongoing coaching and feedback help our employees develop and contribute even more value to our organization.”
Other large enterprise companies have gotten the SaaS talent management memo. In mid-February, Larry Ellison’s Oracle bought out Taleo for $1.9 billion. Oracle rival SAP earlier purchased Success Factors for $3.4 billion. Moreover, cloud-based HR app, WorkDay, is set to go public in 2012.
Naturally, for SaaS talent management to completely work, CEOs need to reinstate tuition reimbursement programs cut during the Great Recession. Moreover, they need to drop the prevailing canards that finding the “right employee” is just a matter of fine-tuning some resume-reading algorithm or endlessly searching for employees with the precise skill sets they require. Instead of going on CNBC bemoaning the lack of “qualified job candidates,” CEOs and their managers need to take a closer look at the ready, eager, if imperfectly trained, candidates before them, and then invest in those hires over the long-term. Retention rates will go up, hiring costs will go down, and, finally, we might make a serious dent in the unemployment rate, regardless of what happens in Washington, DC.
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