The squeeze for talent

Companies are under increasing pressure to find job candidates who will work out

May 10, 2006|By HANAH CHO | HANAH CHO,SUN REPORTER

The war for talented workers is heating up in corporate America.

Managers face competing pressures in recruiting: the upcoming retirement of the baby boomers, low unemployment and the high costs of training new workers. The pressures are forcing companies to spend more energy on making the right hiring decision from the start because they already know that the wrong one can hurt morale, lower productivity or even cause embarrassment for years to come.

Besides traditional methods such as vetting resumes, checking references and conducting extensive interviews, some employers are relying more on online personality tests and other assessment tools to help make better hiring decisions. Most often the final decision comes down to whether managers believe a job candidate will mesh with the company's culture.

Making the right hire the first time around pays off because a poor choice can produce costly outcomes. As a general rule of thumb, it costs a company twice the annual salary of the departing employee to replace him.

The hiring process has "gotten a lot more attention because there is a war for talent," said Clay Parcells, a regional managing principal at Right Management, a consulting and outplacement firm.

"Baby boomers will be retiring very shortly. Employers want to make sure they attract the right type of talent who could fit well in the organization and grow, develop and continue to help the company be successful."

In a recent survey of 444 companies, conducted by Right Management, 68 percent of respondents said a decline in employee morale was the biggest consequence of making a bad hire. Decreased work productivity was listed by 66 percent of respondents, according to the survey, which has a margin of error of 4.6 percentage points.

At W.L. Gore & Associates in Newark, Del., recruiters follow a rigorous interview process to find the right employees to fit into their unique culture.

The company - best known for making Gore-Tex, the waterproof fabric used in apparel - has no chains of command or titles. Employees are known as associates and they don't report to bosses but are accountable to each other. The company, which has plants in Elkton, employs about 7,000 workers globally, including engineers, a sales team, marketing professionals and others.

Barbara Pizzala, Gore's recruiting leader, said an interview team representing different departments evaluates a candidate's job experiences and how they achieved their professional goals.

References also are checked methodically, she said.

"When you bring somebody in who doesn't function well in our environment, it has a ripple effect on the entire team," said Pizzala, a Gore recruiter for 19 years.

A bad hire at the executive level can also cause embarrassment for the company. Dale Winston, chief executive officer of Battalia Winston International, an executive search firm, pointed to the recent resignation of RadioShack Corp. chief executive David J. Edmonson, after an education qualification on his resume was questioned.

The costs are "too enormous," Winston said. "Companies are driven by people."

Employers are using intelligence and personality tests as well as role playing and problem solving to test a candidate's skills. Companies such as Universal Studios Hollywood theme park, Albertson's grocery chain and Finish Line stores use these test to assess a job candidate.

"You're seeing more people doing testing that helps with trying to predict who could work well with others, in teams and with diverse or global audiences," said Joyce Russell, a teaching fellow of management and organization at the University of Maryland's Robert H. Smith School of Business.

Unicru, an employment testing company in Beaverton, Ore., has seen its business grow over the past several years in part because companies increasingly are looking for more efficient methods to find the right people for the job, said Kevin Tate, the company's senior director of marketing.

Unicru works with companies such as Albertson's, Finish Line and Universal, using online tests to assess a job candidate's personality and work behavior.

Lewis Maltby, president of the nonprofit National Workrights Institute, said employment tests should not "usurp human judgment."

"There's something wrong when the test runs the hiring process," he said.

The U.S. Department of Labor Employment and Training Administration offers a how-to guide for employers looking to use assessments in their hiring practices.

The guide provides suggestions about the value of certain tests as well as a summary of federal laws governing the workplace.

With skills and education being equal, employers, human resource experts and recruiters agree that a candidate's potential fit with the company's culture should be a key factor in hiring.

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