Best practices for optimizing the talent pool in any economic climate

Best Practices for Optimizing the Talent Pool in Any Economic Climate

Sarah Peiker

© 2010 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/ert.20295

With so many out-of-work people, find-ing qualified candidates should be eas-

ier than ever, right? There certainly is noshortage of individuals to choose from.According to a recent global trend reportfrom the International Labor Office (ILO),the number of jobless people worldwidereached almost 212 million in 2009, and thatnumber is expected to remain high in 2010.1

In the United States, the Bureau of LaborStatistics indicates that the national unem-ployment rate continues to remain high.

However, an influx of people in the market-place does not lessen the challenge of recruit-ing the right candidates with the right skillsfor the right job. Although the number of peo-ple available to work has increased, the size ofthe talent pool has essentially remained thesame. That is because regardless of the num-ber of people applying for jobs, the distribu-tion of average, good, and great candidates inthe talent pool remains unchanged.

To illustrate, a company in the manufac-turing sector had an open position for asenior-level executive in the same location in April 2009 and again in March 2010. In2009, 194 applicants applied within 23 days,of which 11.8 percent were qualified.2 In2010, 73 applicants were received in 12 days,of which 12.3 percent were qualified. Whilethe number of applicants varied, the avail-ability of qualified candidates stayed rela-tively the same.

In a good economy it is challenging to findqualified candidates, but it can actually beeven harder when economic conditionsworsen and the number of people out ofwork increases. For recruiters and hiringmanagers, an increase in unemployed indi-viduals translates to a greater volume of can-didates and “mismatched” talent to reviewand screen in order to find those “right-fit”candidates. In some cases, the individuals’skills do not match those required for thejobs, or, when the skills are appropriate, theindividuals are not located where the jobsare.3

It is not just the exponential growth ofavailable workers that is adding to the con-tinuing challenge of finding qualified talent.In an uncertain economy, passive candidateswho are currently employed may not con-sider leaving their current position. For oneparticular company, the number of qualifiedcandidates who withdrew from the interviewprocess after being fully screened nearlydoubled from 2008 to 2009, with candidatesciting a “decision to not make a careerchange at this time” as the reason for disen-gaging from the recruiting process.

As economic conditions improve, having ablueprint for growth and thinking differentlyabout talent-acquisition strategies is whatwill help companies drive their businessesforward. More than half the respondents to aMcKinsey Global Survey expect intensifying

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Employment Relations Today

competition for talent—and the increasinglyglobal nature of that competition—to have amajor effect on their companies over the nextseveral years.4 As organizations expand theirglobal footprint, the need for a global talentpool and access to quality local talent to facil-itate operations across borders and cultures isimperative to success. Organizations thatunderstand how to optimize the talent pool—both globally and locally—will be able toeffectively recruit and retain, driving a sus-tainable competitive advantage.

DECONSTRUCTING RECRUITING MYTHS

With the abundance of talent in the market-place, why has selecting qualified candidatesgotten harder? Common myths around current

recruiting efforts include the perception ofincreased availability of talent and an accessi-ble abundance of specialized skills as well asthe notion that there are more diverse candi-dates looking for work. By perpetuating thesemyths, organizations actually inhibit successfulrecruiting. Gaining a realistic perspective ofavailable talent and then understanding howto optimize the talent pool will enable organi-zations to recruit more effectively.

The Availability of Talent

As anyone reading the newspaper or listeningto televised news knows, there are historicnumbers of people out of work. The latestrecession took its toll in the form of job cuts,

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furloughs, and wage and benefit reductionsin just about every industry, and some fieldshave been hit harder than others. The con-struction, manufacturing, retail, real estate,and auto industries have been disproportion-ately affected, contributing to significant jobloss across those sectors.5 As expected, hiringin those industries has dropped off, andmany of those jobs are likely gone for good.For job seekers, this means pursuing otherindustries or jobs outside their realm of expe-rience. However, the skill sets available fromthis population may not necessarily translateto a more widespread talent pool for positionsin other industries. Although there is anabundance of talent available, skill sets maynot align with the needs of industries that arepredicted to experience rebound or growthsuch as education, health services, govern-ment, and business and professional services.6

According to Manpower’s annual TalentShortage Survey, the top five positions em-ployers are having the most trouble fillingglobally remain relatively unchanged: skilledmanual tradespeople, sales representatives,nurses, technicians (technical workers in theareas of production/operations, engineering,and maintenance), and drivers.7 (Restaurant/hotel staff, managers/executives, engineers,doctors and other nonnursing professionals,and customer-service/support representativesround out the top ten positions on the listthat employers are having difficulty filling.)

Changing demographics and the numberof baby boomers exiting the workforce havealso affected the availability of talent. TheU.S. Census Bureau forecasts that the 65-and-over population will rise from 38.7 mil-lion in 2008 to 88.5 million by 2050.8 Simi-larly, several industrial nations, includingGermany, Japan, Austria, Spain, Italy, Sweden, and Greece, will also experience a

Organizations that understand how to optimizethe talent pool—both globally and locally—willbe able to effectively recruit and retain, drivinga sustainable competitive advantage.

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contraction of their working populations.The decline of baby boomers in the globalworkforce has led some economists to pre-dict labor shortages of 10–15 million in thecoming decade.9 Market research firm IDCpredicts that by 2016 the United States willexperience a three-million-person shortfall intrying to satisfy workforce needs.10 Escalat-ing numbers of college graduates are enter-ing the workforce, but they will not possessthe same knowledge and skills as agingworkers. This requires organizations toinvest in training and development to culti-vate a workforce with the skills they require.

Organizations looking for plant or projectsupervisors or automotive mechanics mightfind plenty of candidates available becausethe construction and auto industries were hithard during the recession. However, the spe-cialized skills possessed by this demographicwill not necessarily increase the talent poolfor organizations seeking knowledge workers.For example, a pharmaceutical manufacturingcompany that is seeking an operations techni-cian received 238 applicants. Of those, 22met the minimum qualifications. In contrast,a position requiring more specific skills net-ted 34 candidates with only one candidatemeeting the minimum requirements.

Facing a Talent Mismatch

Along with the perception that there is aplethora of talent available is the myth thatthere is an abundance of people with theexact skill set required for every position. Butthe truth is that there is often a mismatchbetween the individuals available for workand the specific skills employers seek whenrecruiting for a specific position. An adver-tisement for an open position may net hundreds or even thousands of résumés,

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but how many of those applicants actuallyhave the skills required for success? OneManpower Business Solutions client has18,683 applicants in their applicant trackingsystem, but only 67 of them have experiencein the relevant field. Some people might bevery talented and impressive but lack theright combination of skills required by anemployer.

Geographic location may also influencethe types of skills available in a particulararea. Finding someone with significant lifesciences experience may be achievable in ametropolitan area like New York City orNorth Carolina’s Triangle Park but improba-ble in more remote locations without incur-ring significant relocation costs. Plus, if the

industry in which an employer is recruitingdoes not have high turnover or has not beensignificantly affected by the economic down-turn, there is a good chance potential candi-dates are employed elsewhere and notactively looking.

Regardless of relevant skill fit, most HRexecutives are swamped by a flood of appli-cants because the sheer volume of peopleapplying for open positions has dramaticallyincreased. The number of “average” perform-ers in the marketplace is also significantlyhigher. Sorting through a large volume ofcandidates is taxing to HR departments thathave reduced their own resources in responseto lower hiring rates. The end result is that

Escalating numbers of college graduates areentering the workforce, but they will not possessthe same knowledge and skills as aging work-ers. This requires organizations to invest intraining and development to cultivate a work-force with the skills they require.

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candidates cannot be effectively screened andonboarded.

So, just because millions of people areunemployed, it does not mean the skills, edu-cation, and experience that a companyrequires will be available. With an abun-dance of candidates applying for each openposition, recruiting gets harder, not easier.

The Pursuit of Perfection

Defining workforce needs and where thereare skill gaps is critical to successful recruit-ing. However, even with so many people outof work, it is not easy to find a broad selec-tion of candidates with the exact set of re-quired skills in every location. Organizationsthat are too defined in their requirements

may discover that the pursuit of perfection islikely to paralyze recruiting efforts, yieldfewer candidates, and elongate the time to fillopen positions. Hiring managers are focusedon finding the person with the right fit—matching roles and responsibilities with req-uisite skill sets, competencies, and experi-ences, along with behaviors and values thatalign with the organization’s mission, vision,and values.11 When the definition of requiredskills is too narrow or restrictive, it can sig-nificantly limit the qualified talent pool.

Structural unemployment as defined byeconomists is a disconnection between theskill sets prevalent in the labor pool andthose demanded by employers. Employersmay be intent on hiring only candidateswhose background and capabilities are an


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exact match, but to broaden the talent poolthey need to be realistic in assessing what isavailable in the marketplace. What’s more, itis not just the skills on a résumé that definean ideal candidate, but their “soft skills” aswell. Determining cultural fit and ability tolearn is not something that can be gleanedduring initial résumé screening.

Instead, organizations need to “fish wherethe fish are” and consider those candidateswith transferable skills, knowledge, and capa-bilities. They must refine job descriptions andcandidate evaluations to identify people with“teachable fit” rather than traditional fit.

Because jobs in manufacturing, construc-tion, and professional and business serviceswere hit hard during the recession, there arelikely more candidates from those industriesapplying for open positions. Employers needto think about how those types of skillsmight be able to benefit their organization.For example, someone who worked as a jour-neyman carpenter has developed supervisoryskills and spent time training new employees.A construction foreman is likely to haveexperience with purchasing and materialsmanagement, project analysis and planning,and transportation and logistics.

Expanding the talent pool requires lookingat the talent that is available and identifyingcomparable skills that will meet businessneeds. A better approach than creating a listof stringent requirements is to consider themandatory competencies that are required foran open position and then take into accountthe other industries and occupations thatcould be the source of these portable skills.

BUILDING A DIVERSE WORKFORCE

More organizations are adopting the practiceof increasing diversity, but—as with the size ofthe talent pool—the proportion of diverse

Employers may be intent on hiring only candi-dates whose background and capabilities arean exact match, but to broaden the talent poolthey need to be realistic in assessing what isavailable in the marketplace.

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candidates does not change in turbulenttimes. As noted earlier, as baby boomersleave the workforce, knowledge and skillswill leave with the retirees, and the work-force is expected to steadily decline through2050.12 These demographic changes canaffect the availability of a diverse talent pool.

Some organizations may view diversity assynonymous with minority hires or comply-ing with affirmative action. Instead, theyneed to encourage an environment of inclu-sivity and consider how providing culturallyappropriate practices will increase recruit-ment and retention and deliver a competitiveadvantage.

It’s also imperative to understand the timeit takes to produce a heterogeneous pool ofcandidates, particularly as demographics shift.For example, as in most countries, the field ofengineering in the United States has beenlargely dominated by men. However, as aresult of government and industry influence,educational institutions have been encouragedto increase the numbers of women andminorities pursuing careers in engineering.Today women earn almost half of the bac-calaureate degrees awarded in science andengineering, more than 40 percent of the mas-ter’s degrees, and more than one-third of thedoctoral degrees, according to a report fromthe National Science Foundation.13

Women in general are adding a newdimension to the global talent pool. Accord-ing to research from the Center of Work-LifePolicy, in emerging markets such as Brazil,Russia, India, China, and the United ArabEmirates, women constitute a pool of highlyqualified talent just waiting to be tapped.14

Organizations that look to the female talentpool as they expand into new markets canuncover vast new talent sources, supportdiversity goals, and recruit more effectively.


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Expanding the pool of diverse candidatesrequires defining the rationale for having adiverse workforce and considering strategichires from other industries to build organiza-tional capabilities. It also takes time to culti-vate a diverse talent pool. Diverse-candidatedemographics need to exist for organizationsto be able to tap into and attract and retaincandidates with varied origins, perspectives,and life experiences. Make sure to under-stand the business rationale for having adiverse workforce and create a culture that isinclusive.

DEVELOPING STRONG WORKFORCESTRATEGIES

Appreciating that the fundamentals of the tal-ent pool do not change quickly, even in the

face of a global recession, means organiza-tions can then implement strategies to opti-mize the talent that is available. To develop apool of right-fit candidates that meet businessrequirements, consider the following:

❏ Know what you need, but be flexible. Definewhat you need but be willing to broadenthe scope of skills and talents you arelooking for based on what is available.Consider redesigning jobs so they becomemore engaging for the people undertakingthem.

❏ Identify individuals with transferable skills.Think about candidates with comparableskills from other industries or expand

Expanding the pool of diverse candidatesrequires defining the rationale for having adiverse workforce and considering strategichires from other industries to build organiza-tional capabilities.

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your search by sourcing candidates in dif-ferent geographies.

❏ Hire for innate talents and be willing toinvest in training. You may find a candidatewith the right attitude, experience, andproblem-solving skills but who is lackinga certain certification or skill set. Onceyou have defined the skills and talentsrequired for a position, prioritize the char-acteristics most important to get the jobdone and areas that can be successfullyachieved through training.

❏ Draw from the in-house talent pool. Identifyinternal resources you can grow and nurture.

Cross-train your workforce so they are ableto perform a broader variety of tasks.

❏ Make diversity a reality. To bolster diversity,make sure the organization culture willenable diverse employees to thrive. Be will-ing to invest in training so you can meetdiversity goals. Identify and create allianceswith national minority organizations ortrade associations and target recruitmentadvertising to minority publications.

❏ Build a candidate pipeline. Finding qualifiedtalent is complex and time-consuming.Build bench strength by cultivating rela-tionships with candidates whose skillsalign with your organization’s futureneeds. This way, when you have an openposition, you can tap into a readily acces-sible talent pool.

❏ Gain access to expertise. Consider partner-ing with a recruitment-process outsourcing


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(RPO) provider to manage the influx ofrésumés, improve processes, and deliver abetter candidate experience. Recruitment-process outsourcing is a form of business-process outsourcing (BPO) where anemployer elects to outsource all or part ofits recruiting function. RPO enables orga-nizations to tap into expertise and addi-tional resources to efficiently find right-fitcandidates. With experience across a broadrange of industries, an RPO partner hasvaluable insight into a variety of compara-ble skill sets and can alleviate the burdenof sorting through mismatched candidatesto find those individuals with the righthard and soft skills.

RPO providers can scale up or down tomeet fluctuating business needs and haveinsight into the most effective recruitingstrategies, helping organizations optimize thetalent pool to meet their hiring needs. AnRPO can conduct market analysis on popula-tion demographics to deliver insight on diver-sity opportunities. With global capabilities,more companies are turning to RPO becauseit makes the recruiting process less expensiveand more effective and efficient.

OPTIMIZING THE TALENT POOL

Boom or bust, the strategic fundamentals ofthe overall talent pool change slowly—andthat means the challenges of hiring in a“buyer’s market” for talent are every bit asgreat today as they are during stronger eco-nomic times. By leveraging the existing talentpool, nurturing global networks, and investingin diversity, organizations can effectively minenew talent sources, build multicultural talent,and be well positioned for market success.

Effective recruitment results in hiring theright candidate for the right job and plays a

By leveraging the existing talent pool, nurturingglobal networks, and investing in diversity,organizations can effectively mine new talentsources, build multicultural talent, and be wellpositioned for market success.

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strategic role in a company’s ability to developnew products and services and expand into newmarkets. Having the right resources to identifynew sources of talent, efficiently screen outmismatched candidates, and build a strong tal-ent pipeline is critical to the success of everyorganization’s recruiting efforts. By optimizingthe talent pool, organizations can gain accessto skills that support business goals, buildbench strength, and recruit effectively toenhance competitive advantage.

To mitigate the situation, they shouldbroaden their search for candidates to includeindustry migrants, location migrants, rolechanges, and workforce entrants. By looking atcandidates with transferable skills or thosewilling to relocate, organizations can broadentheir reach and optimize the talent pool. If thetalent and skills are truly unavailable, employ-ers need to refine job descriptions and candi-date evaluations to identify people with“teachable fit” rather than traditional fit. Byinvesting in training and development andfocusing on a candidate’s innate characteris-tics, organizations can build their workforceand gain access to the skills they need.

NOTES

1. Global employment trends report. (2009). Geneva,Switzerland: International Labour Organization.

2. Manpower Business Solutions.


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3. Manpower Inc. (2008). Confronting the talent crunch,http://us.manpower.com/uscom/files?name=2008_Talent_Crunch_White_paper.pdf.

4. The organizational challenges of global trends. (2007).McKinsey Quarterly, http:// download.mckinseyquarterly.com/organizational_challenges.pdf.

5. Bureau of Labor Statistics, U.S. Department of Labor.(2010, January). The employment situation. Washington,DC: Author.

6. Bureau of Labor Statistics, U.S. Department of Labor. (2009, December). The 30 occupations with the largestemployment growth, 2008–18. Washington, DC: Author.

7. Manpower Inc. (2010, May). 2010 talent shortage survey,http://www.manpower.com/research/research.cfm.

8. U.S. Department of Commerce, U.S. Census Bureau. (2009, August).

9. Catsouphes, M., Sweet, S., & Lynch, K., with Walley, E.(2009, October). Talent management study. Brighton, MA:Sloan Center on Aging & Work at Boston College.

10. International Data Corporation (IDC). (2007, April). ITtraining update: Update forecast and training predictions,http://www.marketresearch.com/map/prod/1516233.html.

11. Ernst & Young. (2008). Global human resources risk: Fromthe danger zone to the value zone. New York: Author.

12. Toossi, M. (2006). New look at long-term labor force projections to 2050. Monthly Labor Review, 129(11),19–39.

13. National Science Foundation. (2009, November). Newundergraduate degrees, master’s degrees and doctoraldegrees. Arlington, VA: Author.

14. Center of Work-Life Policy. (2010). The global talentpipeline in emerging markets. New York: Author.

Sarah Peiker has more than 17 years’ recruiting expertise in designing, implementing,and delivering recruiting solutions. She joined Manpower Business Solutions in April2008 through the acquisition of CRI, a recruitment-process outsourcing company, whereshe led the CRI consulting business and managed large RPO accounts. She may be con-tacted via e-mail at [email protected] or by visiting www.manpowerbusinesssolutions.com.

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Best practices for optimizing the talent pool in any economic climate