The document discusses challenges in filling critical roles through external hiring. It notes that while overall unemployment is high, there are shortages for critical roles that require specific skills. External hiring for these roles is costly, can lower productivity and retention, and risks losing top performers who lack development opportunities. Instead, the document argues companies should focus on internal development and mobility as a default, and improve talent data, job definitions, matching tools, and overall strategy to better source talent internally for critical roles.

1. HIRING
FOR
CRITICAL
ROLES
You’re Doing It Wrong
David Wilkins
VP, Taleo Research
@TaleoResearch
Blog: talent-management-blog

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› Share your point of view
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3. EXECUTIVE SUMMARY
› High unemployment is a myth (when hiring for critical roles)
› Skill shortages for critical roles are bad and getting worse
› “Hiring” as a default approach is mostly bad
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
› We need to switch the model to development and mobility first.
› We need better talent intelligence, job definitions, and matching
tools.
› But mostly we need a strategy.

4. POLL
› Are you having difficulty filling critical roles?
› Yes
› No

5. THE “HIGH UNEMPLOYMENT” MYTH
Education Level (March, 2012) Unemployment Rate
Less than high school diploma 12.9
High school diploma 8.3
Associate’s degree or some college 7.3
Bachelor’s or higher 4.2
Master’s (as of May 2011) 3.6
Doctorate’s or Professional (as of May 2011) 2.4
When it comes to critical roles, which group are you hiring from?
http://www.bls.gov/news.release/empsit.t04.htm
http://www.bls.gov/emp/ep_chart_001.htm
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6. THE CHALLENGE OF CRITICAL ROLES
The R&D shortage is particularly
acute in industries where product
innovation is critical. Among the
Technology/Media/Telecom
companies surveyed, 40% predict a
severe shortage of R&D talent,
while 39% of Consumer/ Industrial
Products companies surveyed and
37% of Life Sciences/Health Care
companies surveyed foresee
shortages in this area.
Talent Edge 2020: Blueprints for
the new normal, December 2010,
Deloitte.
#TaleoTalent

7. THE CHALLENGE OF CRITICAL ROLES
The R&D shortage is particularly
acute in industries where product
innovation is critical. Among the
Technology/Media/Telecom
companies surveyed, 40% predict a
severe shortage of R&D talent,
while 39% of Consumer/ Industrial
Products companies surveyed and
37% of Life Sciences/Health Care
companies surveyed foresee
shortages in this area.
Talent Edge 2020: Blueprints for
the new normal, December 2010,
Deloitte.
#TaleoTalent

8. OTHER PERSPECTIVES
The 2011/2012 Talent Management and Rewards Study, North America, Towers Watson
10 Hardest Roles to Fill in the US: 8 Hardest Roles to Fill in the UK:
1. Skilled Trades 1. Finance and Legal Professionals
2. Sales Representatives 2. Customer Service
3. Engineers 3. Technical and IT
4. Drivers 4. Marketing Professionals
5. Accounting & Finance Staff 5. Sales Professionals
6. IT Staff 6. Production Staff
7. Management/Executives 7. R&D
8. Teachers 8. Administrators
9. Secretaries/Administrative Assistants UK Critical Talent Pipelines, 2012, Taleo
10. Machinist/Machine Operator
Talent Shortage Survey, 2011, ManpowerGroup.
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9. AND THE FUTURE LOOKS WORSE
› Georgetown University Center on Education and the Workforce
on shortfall of college grads in 2018
3,000,000
› Accenture study from 2006 showed that STEM enrollments
would need to increase by
to meet demand 20-30% between 2006-2016
Instead, enrollments have GONE DOWN.

10. POLL QUESTION
› How do you typically fill critical roles?
› Mostly external hires
› Mostly internal hires
› A pretty even mix of each

11. CHALLENGES IN HIRING EXTERNALLY FOR CRITICAL ROLES
› Cost
› Time
› Retention
› Engagement
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12. EXTERNAL HIRE CHALLENGES: COST AND TIME
› External hires cost more
– Critical roles are usually industry-wide, not company specific
– Thus, there is usually high demand for limited resources
– Critical roles are critical for a reason – unique skills, high need
– Scarcity + high demand = high cost
– “Unknowns” in external hiring = more focus on “observable
characteristics” such as education / experience =  pay
› Scarcity also often means head hunters which adds more cost
› Scarcity also means longer time to hire, adding opportunity cost
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13. EXTERNAL HIRE CHALLENGES: COST AND TIME
› External hires cost more
– Critical roles are usually industry-wide, not company specific
– Thus, there is usually high demand for limited resources
– Critical roles are critical for a reason – unique skills, high need
– Scarcity + high demand = high cost
– “Unknowns” in external hiring = more focus on “observable
characteristics” such as education / experience =  pay
› Scarcity also often means head hunters which adds more cost
› Scarcity also means longer time to hire, adding opportunity cost
#TaleoTalent

14. EXTERNAL HIRE CHALLENGES:
RETENTION, PRODUCTIVITY, AND ENGAGEMENT
› External hires aren’t as productive as internal hires; new
research suggests that it takes 2 years to get “up to speed”
› External hires average shorter tenures than internal hires
› External hires average lower performance reviews
› Hiring outside = risk to top performers and high potentials
– “Lack of career development” is #1 reason for dysfunctional
turnover
– “Training and development opportunity” is #1 driver of
employee engagement
– “More opportunities to do what I do best” is #1 driver of
employee engagement
#TaleoTalent

15. EXTERNAL HIRE CHALLENGES:
RETENTION, PRODUCTIVITY, AND ENGAGEMENT
› External hires aren’t as productive as internal hires; new
research suggests that it takes 2 years to get “up to speed”
› External hires average shorter tenures than internal hires
› External hires average lower performance reviews
› Hiring outside = risk to top performers and high potentials
– “Lack of career development” is #1 reason for dysfunctional
turnover
– “Training and development opportunity” is #1 driver of
employee engagement
– “More opportunities to do what I do best” is #1 driver of
employee engagement
#TaleoTalent

16. WHY DOES TALENT LEAVE?
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17. YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:
PERFORMANCE MANAGEMENT AND COMPENSATION
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18. YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:
PERFORMANCE MANAGEMENT AND COMPENSATION
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19. YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:
SUCCESSION AND TALENT MOBILITY
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20. YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:
SUCCESSION AND TALENT MOBILITY
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21. YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:
TOP PERFORMER AND HI-PO DATA IS UGLY
› 80% of companies don’t know who is a flight risk.
› 78% of companies don’t know who is on a succession plan.
› 80% of companies don’t know who has a career path.
› 65% of companies don’t know much about who they’re
retaining.
› 84% of companies don’t if their development plans are working.
› 65% of companies don’t know much about Hi-Po’s.
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22. ADDRESSING THE PROBLEM
External Hires Internal Hires
• Fresh eyes and • Anytime the
perspectives other criteria
• High growth, new don’t apply…
territories, new • In other words,
strategic this should be
directions the “default”
model
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23. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent
Catalog Profiles
Internal
Talent
#TaleoTalent

24. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent
Catalog Profiles
Internal
Talent
Catalog Job
Requirements Job Roles
#TaleoTalent

25. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent
Catalog Profiles
Internal
Talent
Match Potential
Candidates
Catalog Job
Requirements Job Roles
#TaleoTalent

26. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent Development
Catalog Profiles Plans
Internal
Talent
Potential Green light
Match Assess Gaps
Candidates Candidates
Update
Catalog Job Requirements
Requirements Job Roles
#TaleoTalent

27. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent Development
Catalog Profiles Plans
Internal
Talent
Potential Green light
Match Assess Gaps
Candidates Candidates
Update
Catalog Job Requirements
Requirements Job Roles
#TaleoTalent

28. YOUR DEFAULT HIRING FLOWCHART
Catalog
External
Talent
Talent Development
Catalog Profiles Plans
Internal
Talent
Critical
Potential Green light Talent
Match Assess Gaps Add
Candidates Candidates Pipelines
Update
Catalog Job Requirements
Requirements Job Roles
#TaleoTalent

29. Catalog
ADDRESS YOUR TALENT INTELLIGENCE GAPS Internal
Talent
› Where are your skill and competency gaps?
› Do you have robust talent data for your team?
– Pre-hire experience, job roles
– Skills, capabilities, competencies
– Self-identified skills developed in personal life
– Career aspirations and related gaps
– Learning and development plans
– Crowd-sourced assessment of potential, capabilities, fit, etc…
– Current and automatically updated talent data
#TaleoTalent

30. Catalog Job
ADDRESS YOUR JOB ROLE GAPS Requirements
› Have you defined requirements for each job?
› Do you have job families?
› Can you identify potential career paths based on competencies,
capabilities, experience?
› For critical roles, have you identified longer-term competency
development strategies?
– Required experience and levels of mastery
– Education and formal knowledge requirements
– Bridge roles or “stepping stone” roles that provide experience
– Assessment models
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31. Development
DEVELOPING YOUR TALENT Assess Gaps
Plans
› Career Aspirations
› Skill Gap Assessment
› Action Learning
› Stretch Goals and Assignments
› Talent Mobility
› Multi-stage Development and Competency Model
› Mentor / Mentee Models
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32. Update
UPDATE REQUIREMENTS Assess Gaps
Requirements
› Is the job definition static or dynamic?
› How much “wiggle room” is there to rethink work assignments
and responsibilities to overcome gaps?
› Do requirements change over time in response to changing
competitive landscape, strategy, new opportunities or threats?
› Job roles and related requirements are a means to an end
– Reflection of “best” way to organize work, not the “only” way
– Often better to rethink work assignments than lose a top
performer or hi-po for lack of internal opportunities
#TaleoTalent

33. MATCHING – NOT DEEP ENOUGH Match
› Goal is not to “hire,” but to match talent to requirements
› Yet we don’t know the basics
48%
say that their skills go unnoticed
feel that their work history &
experiences are not leveraged by
their employer
75%
#TaleoTalent

34. MATCHING – NOT SOCIAL ENOUGH Match
› Co-workers know talent best, yet aren’t involved in matching
Professional & work Professional & work
capabilities aspirations / ambitions
None of the
Other None of the Other above
1% above 1% 6%
Don’t know 3% My family / Don’t know My family /
5% partner 5% partner
21% 43%
My line manager
My line manager 13%
22%
My friends HR software /
outside of work systems
4% 1%
HR software /
systems
1% My colleagues
My colleagues and peers
and peers 22% My friends
43% outside of work
9%
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35. MATCHING – NOT AUTOMATED ENOUGH Match
#TaleoTalent

36. Critical
BLEND YOUR CRITICAL TALENT PIPELINES Talent
Pipelines
› Internal candidates
› External candidates
› Stop-gap contingent workers
#TaleoTalent

40. WRAP UP
› High unemployment is a myth (when hiring for critical roles)
› Skill shortages for critical roles is bad and getting worse
› “Hiring” as a default approach is mostly bad
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
› We need to switch the model to development and mobility first.
› We need better talent intelligence, job definitions, and matching
tools.
› But mostly we need a strategy.