The Headhunter Effect?

According to Peter Cappelli, professor of management and director of Wharton’s Center for Human Resources. The much ballyhooed "labour shortage" that is often talked about is a myth. The professor gives a number of reasons why the myth is so entrenched in corporate thinking but one of the more interesting ones is as follows:

If there is no impending shortage of labor, why do employers feel that the tight labor market of 1998 to 2001, [...] somehow represented a major shift from what they had known before and presaged a bleak future? One reason, Cappelli believes, is that the pressure to hire laterally from the outside to bring in new skills, which was accelerated during the late 1990s, is a new development in the history of human-resources management. The breadth of jobs that today are filled from the outside – ranging from the mailroom all the way to the CEO’s office – stands in stark contrast to years gone by when recruiting was almost entirely focused on entry-level positions. An increase in outside hiring contributes to higher turnover, which forces employers to be in a state of continuous hiring and gives rise to the feeling that there is a shortage of workers.

“Employers could be forgiven for thinking that this situation looked like a labor shortage: Despite flat-out hiring, they could not bring in enough workers to meet their needs. Retention management should have been part of the solution along with performance management to identify who were the truly important people to retain.”

Gee I wonder if us headhunters are contributing to the myth? After all each time we recruit someone we are creating turnover.

What does Cappelli suggest?

Most firms have to improve their recruiting, but doing so requires more than just coming up with more applicants or filling vacancies more quickly. The overarching goal should be to make better matches between applicants and jobs. That means uncovering the right applicants who truly fit the jobs they apply for. Matching the right person to the right job not only leads to better performance but also to reduced turnover, according to the study.

The real issue then will be to have a system of practices in place of finding good people, hiring them when you need them and keeping the good ones.”

Fair enough but Capelli doesn't give any info as to how companies can improve their matching skills. It's fine to say that companies should look to improve retention but if you can't find the right fit to begin with it's a moot point.

Find the complete article here

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