Four Ways Modern Hiring is Broken, and How to Fix It

In my previous career as a staffing consultant, I once pitched a staffing product to the HR leaders at a big financial services company, which had recently completed a huge merger. 

The CEOs of both merging companies had told an industry magazine that cost-cutting would be a top priority for the newly formed organization, so my presentation was focused on highlighting this part of the solution. 

The HR leader I was pitching to stopped me mid-pitch and said, “actually, cost-saving isn’t such a big mandate for us at the moment.” 

Unfortunately, at the age of 27, I wasn’t smart enough to pull out my copy of the magazine and say, “well, that’s not what your CEOs think, and if it isn’t a mandate now, it will be very soon.” 

In any case, I did learn an important lesson: HR wasn’t always involved when broader strategic decisions were being made, which means that it wasn’t always treated as a core function. But things are rapidly changing. 

The Pandemic has Been a Wake-Up Call for Leaders 

Before the pandemic-era job market emerged, the talent management function had become increasingly inundated with language from supply chain management.  

The process of hiring became more commoditized and recruiting functions started getting outsourced. This created an environment where people increasingly started getting treated more like inventory than talent. 

Fast forward to 2022, and we now live in a world where “the big quit” or “great reshuffle” is big news. In reality, many of the factors that brought it about have always been a problem. 

Hiring Issues are now a Board-Level Risk

In a survey for Corporate Board Member magazine, 42% of board members said that talent attraction and retention was the No. 2 issue that will influence the success of a company, right after the economy.

However, if talent upskilling, workforce health and safety, and remote or hybrid work are folded into talent management as an overarching concern — it’s the clear frontrunner. 

Data via: 

Now that people are changing jobs at unprecedented rates, the recruiting process is finally taking its rightful place as a board-level risk. The most important realization leaders can have is to understand that the “great resignation” is not the real problem, but rather a symptom of a fundamentally broken system. 

Four Ways Modern Recruiting is Broken

1. The hiring process starts too late

When you think about the usual hiring process, what is the starting point? Typically, it’s when a hiring manager identifies the need for an additional person to handle specific tasks and notifies the recruiting team that they have a role to fill.

This means that we start looking for candidates after we need them. Starting from this point means that you’re introducing urgency into the hiring process from the outset. Recruiters and hiring managers begin as “urgent buyers” seeking “urgent sellers.” 

Many times, the situation is so dire that companies simply hire whoever is immediately available among their active talent pool. This in turn means that they miss out on the best candidates for the job. 

Naturally, the best person for the job is often employed elsewhere and whether they move to your organization comes down to the compensation package you offer them, effectively creating bidding wars for the best talent. 

According to Harvard Business Review, pay remains the most critical factor in attracting new talent. Why? Because unless your organization makes compelling offers to attract top talent and then puts in the necessary work to retain them, you’ll constantly miss out on passive candidates and lose top talent to your competitors. 

2. Internal recruiters may not understand the complexities of a role 

In the modern hiring process, building the top of the talent funnel falls on the recruiter’s shoulders. The expectation is that they will do their best to gain an understanding of the technical and soft skills needed to execute a particular role and then search for the best available candidates to fill up the top of the recruitment funnel

Most of the time, they base their efforts on a job description that starts to grow obsolete from the minute they’re done writing it. If there are multiple roles to fill, recruiters might even recycle job descriptions because they are overwhelmed by the sheer volume of tasks. As a result, recruiters risk diluting the quality of the candidate pool. This solidifies that “urgent buyer/urgent seller” dynamic, causing organizations to hire less-than-ideal candidates. 

Another problem that often occurs: the menial task of sorting through resumes falls to the most junior recruiters. They may not have the experience or expertise to understand the complexities and subtleties of a role, especially if it’s a technical one. 

3. External recruiters aren’t close enough to company culture 

People are the soul of a company. But oftentimes, especially in smaller organizations or for highly technical roles, the talent acquisition process is outsourced to external recruiters. But as business author Tom Peters once said, “outsource everything except your soul.” 

While agency recruiters might be highly specialized when it comes to identifying the right skill set, they may not have as good a handle on a company’s ethos and culture or an understanding of the soft skills needed to thrive in a role at a specific company. 

4. Recruitment management systems can create a blind spot 

On one memorable occasion, I was helping another financial client source candidates for a job in corporate actions. I sent them a candidate who had run the dividend processing unit at a competing bank — almost a perfect candidate. 

I was surprised when this candidate was rejected by the client’s recruiting team, so I called them to find out why. The internal recruiter, who was a junior member of the team, said that my candidate didn’t have the term “corporate actions” on their resume. Dividend processing is, in fact, a corporate action. This recruiter clearly lacked deep knowledge of the role’s requirements and was relying on the recruiting tech stack to navigate the process of finding candidates. 

Applicant tracking systems (ATS) and recruitment management systems (RMS) are two of the most widely used tools in the modern recruiter’s tech stack. Experts estimate that 90% of employers use ATS and RMS to filter and rank candidates. They help to surface the “best fit” candidates based on keywords and direct them through an otherwise overwhelming recruiting process. 

It’s important to remember, however, that these technologies are far from perfect. Because they focus on keywords, many candidates are arbitrarily added to the talent pool simply because they have worded a skill in a specific way or have the right education. Conversely, others may never be considered for a role because their resume lacks a specific keyword, they fail to meet certain criteria, or have a gap in their full-time employment history. 

This results in a whole set of “hidden candidates” who might have done well in the role with training or simply fell through the cracks because they didn’t have the right keyword on their resume. 

The Fix is Real Candidate Engagement 

According to LinkedIn, only 30% of people are actively looking for a job at any given time. Recruiters are fighting tooth and nail for less than a third of the talent market and missing out on engaging the other 70% of passive candidates. 

The talent acquisition process needs to be fundamentally reimagined with a focus on candidate engagement. This can only be done if hiring managers play a more active role throughout the recruiting process. 

Any hiring manager worth their salt is well aware of the emerging requirements on their team. They are also typically the person with the best idea of the hard and soft skills needed for the open position. 

Additionally, if they are in a highly technical role, they probably also have the best personal and professional network of relationships to lean on when seeking the next addition to their team.

Since 88% of employers rate employee referrals as the best source for quality candidates, it follows that hiring managers should be doing more to engage with potential talent before they need to hire for a specific role. 

Making the hiring function more strategic is all about ensuring that the hiring managers in your organization cultivate relationships with top talent, with recruiters playing a more supportive role. Not only can this result in a much-improved candidate experience, but it can also help organizations cement their reputation as reputable employers.