The Economic Reality of Recruiting

Just 24 months ago, anyone who wanted a frontline, hourly worker’s job only needed a pulse to get hired. Now, we are faced with staggering unemployment, massive underemployment and tremendous job dissatisfaction. A new report releases from The Conference Board found that just 45% of workers in the U.S. were satisfied with their jobs, the lowest level in the 23-year history of the report.

Today’s applicants, mostly the unemployed, are desperate, and desperate people do desperate things. That’s why employers can no longer rely on the ways they used to recruit, screen, hire and retain frontline, hourly employees. In fact, precisely because unemployment is high and employee turnover is low, it is harder than ever to attract the best and repel the rest. Here’s why:

1 It’s harder to attract and hire star employees today because stars, even if unhappy, aren’t looking for new jobs. They are just going to stick it out until the economy improves and they feel more secure about making a change. The Bureau of Labor Statistics reports that the total separation rate, which includes quits, layoffs and discharges, and other separations including retirement, has been holding at its lowest levels since early 2007.

2 While many companies have had layoffs, no one is letting their best people go. So far, more than two million people under age 30 have lost their jobs in this recession. Employers “are holding on to more of their older workers than ever before,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. “The younger and less educated you are, the more likely you’ve been thrown out of this labor market.” The bottom line is employers need their most competent, experienced hands on deck right now.

3 The layoffs, hiring freezes and high levels of unemployment have translated into an avalanche of job applications for every open position, making it that much harder to identify star employees today. The huge increase in the quantity of applicants does not translate into better quality. The haystack has just gotten a lot bigger, which makes the stars much harder to find.

4 In these tough times, employers need all the stars they can get just to survive—and, more importantly, to position themselves to thrive when the turnaround comes. The fewer people you employ, the better each and every one of them needs to be.

5 Recent surveys report that more than 90% of employees are satisfied with their jobs, but only because they are happy to have any job at all. The same surveys report over 70% of employees will be looking for a new job as soon as the economy improves. What are you doing to ensure your best and brightest don’t jump ship when things pick up again? If you’re taking advantage of the current situation to slack off on employee retention efforts and focus elsewhere, it’s sure to come back and bite you.

6 The good news is employee turnover is down. The bad news is employee engagement and motivation are down, too. This dissatisfaction is fueled by media reports about the huge discrepancies between CEO earnings and workers’ earnings, especially when so many CEO’s have failed so miserably in public of late. Then throw into the mix the reaction to the TV series Undercover Boss. As reported on MSNBC, “…much of the incognito intelligence these men gathered seems wincingly obvious to anyone who earns a buck any place other than a sumptuous corner office: Frontline jobs make you sweat, make you tired and often leave you feeling underappreciated. Working for a living is tough. Shocker.”

7 Today’s applicants are desperate. They falsify employment documents and stretch the truth in interviews. Once hired, desperate employees may sue, file complaints or even fake accidents.

A recent study from Challenger, Gray & Christmas Inc. found that most resume fraud is missed because employers don’t bother to check a candidate’s work experience, education or references. Companies that do thorough background checks are finding more false information or exaggerations than in the years preceding.

A prime example is Dallas-based Automatic Data Processing Inc., which reported that 46% of all fact checks the company did in 2008 revealed some discrepancies, which is an increase from 41% in 2007.

In commenting on that study, an article from ScrippsNews noted that those numbers are probably much higher now, taking into consideration that there are tens of millions of unemployed Americans, many of whom have been out of work for at least six months.

Vikita Poindexter, owner of an HR consulting firm in California, told Scripps that job seekers have turned to listing fictional former employers that are no longer in operation on their resumes. “It is something that is pretty prevalent right now,” she said “I try to educate my clients to do full background screenings, but you’d be surprised how many don’t. Someone presents a list of past employers and every one has gone out of business, so there’s no way to check. That’s a huge red flag.”

Other common falsifications are:
• Job titles: Making or boosting a title in order to command a better salary. One person claimed to be a chief financial officer, but held a minor job in the accounting department.

Others minimize their accomplishments in order to qualify for less well paid jobs.

• Education: Listing a degree from a school not attended; mentioning a school that is not accredited; inflating GPA or embellishing honors.

• Reason for leaving: Saying they were a victim of a mass downsizing when in reality they were let go for poor performance.

• References: Some try to pawn off family members as business references.

8 When it comes to hiring, there’s 10 times more information on the market about how to look like a winning applicant than there is on how to pick a winner. Hiring managers need the newest strategies and tools to regain the upper hand.

9 The most profitable customers you have are the ones who keep coming back and what brings them back is the quality of the products and services delivered by your hourly employees. That’s why the most important decision you make every day is who you allow in the door to take care of your customers.

10  A University of Chicago study showed that hiring decisions based solely on an interview are only 8% more successful than flipping a coin and no business can long survive those odds.

Yes, the world is an entirely different place now than it was just two years ago. Have you adapted your hiring practices to deal effectively with the new reality? CSD


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