Home

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

Why Your Approach to Hiring Is All Wrong

Chris Porteous
Chris Porteous
Co-founder and CEO at Framestr

Some companies' current hiring approach is flawed. A more measured approach is necessary to find skilled, talented, long-term workers.

Hiring in the 21st century is a complicated business. In the past, businesses would typically promote internally. The idea of the "company man" who worked their way up the ladder is a central component of the fabled American dream. In the '50s and '60s, the "company man" was how businesses protected their interests. Training employees was expensive, and having someone who knew how the industry worked (along with all of its secrets) was a godsend to move them up the ranks. However, things changed drastically in the '70s and '80s. Restructuring and layoffs saw businesses move to a more generic method of functioning. The prevailing wisdom was that your company should mirror what the top companies were doing, and eventually, success would follow.

In the wake of these changes, businesses realized that they no longer had to promote up the ranks. If an employee was doing a particular function for their offices, chances are their competitors had someone who was doing the same job. Stealing away talent from competitors became a more viable method of getting new hires. There was no time and money investment to train these hires, and their contribution to the business could be immediate. A 2017 survey of CEOs conducted by PricewaterhouseCoopers found that most executives were concerned about hiring talent that fits with their business.

Companies' current hiring approach is all wrong, and this article intends to show you precisely what's wrong with it.

Look internally first.

Internal job boards exist to give the company somewhere that they can look for internal talent first. It came as part of the dot-com explosion and remained because of its usefulness to other industries. The internal job board was initially designed to ensure that small startups didn't suffer from employee turnover. Employees who wanted to move on could look at their company first to see if there was a job available instead of leaving for a competitor.

When the 2008 recession hit, employees weren't interested in leaving, since job security became their No.1 concern. Managers took it upon themselves to ensure that those subordinate to them could not move up internally. Many talented employees get left behind when companies don't use their internal job boards to fill their vacant positions.

Another way that businesses abuse the job board is by posting "phantom jobs," a phantom job doesn't exist, but it's an excellent way for companies to build up their roster of skilled personnel in case they need them. Inevitably, job boards such as Indeed and Monster find these phantom posts and send them out for applicants. The result is that the company gets an influx of applications for a job that doesn't exist. They can then reference these applicants in the future if a vacancy comes up. 

Consider how expensive hiring is.

One of the merits that external hiring has had for businesses is cutting back on the amount of money they spend on training new hires. Talented hires are supposed to be able to jump into a job quickly with little onboarding. Yet, in today's highly specialized industries, companies have developed many internal practices that are unique to their offices. According to Wharton, new hires may take as much as three years to perform at the same level as internal hires, while internal hires may take seven years to match the pay that companies dedicated to externals.

These facts shouldn't discount external hiring completely. However, it should show you that a more measured approach is necessary. The truth remains that getting software engineers to stay could potentially lower the costs you spend in the long term compared to if you hire new engineers externally. The internal employees are likely to function much more efficiently and at a far better cost than external hires.

Be wary of referrals.

LinkedIn Business notes that 48% of new hires come from employee referrals. Many businesses depend so heavily on this recruitment methodology that they run the risk of a lack of diversity. Human beings tend to know people who are just like them. These referrals can lead to a series of hires that all share similar interests. While this might be a problem for company culture, it could lead to some awkward questions about diversity and may lead to problems with the business adapting to thinking outside of the box.

Utilize analytics to offer feedback.

Can you imagine a marketing department that doesn't see whether its marketing tactics improve its sales numbers? Businesses that rely blindly on hiring practices that claim to use data science are doing much of the same. The truth is that few employers know which channels benefit their business the best when it comes to finding talented candidates. Businesses can narrow down their current employees and track back to the company's start, figuring out which recruiting practices led to the most productive (and longest-lasting) candidates. Using data removes the personal feelings that a manager may have about certain hiring practices.

Try to get fewer candidates to apply.

This approach is the polar opposite of what companies do now. Phantom jobs postings and passive recruiting create a system in which there are more candidates than there are jobs. The idea behind this tactic is to make hiring more efficient by getting more people to apply. Many employers promote this by getting the word out that their organizations are desirable to work at. 

By paring the applicant pool down before application, however, a business stands a better chance of getting more qualified and skillful applicants applying to positions. Each applicant costs you money to go through their qualifications and decide if they're worth hiring. With many other similar jobs having openings, the longer you take to make up your mind, the less likely it is you'll get the ideal candidate. Even once you have a shortlist of candidates, the final decision can be difficult because of the very act of creating a shortlist.

Individuals who have made it in as candidates are less likely to tell the truth because they want the job. The employer is less likely to tell them the truth about the position because they want the candidate to accept the job. The result is that neither party knows what they're signing up for. A better approach is to be honest with the candidate, including the position's limitations and what it entails, including the dirty details. A candidate who is aware of what they're signing up for is less likely to become disgruntled and leave. On the other hand, the company would narrow down potential candidates to those who genuinely want to work the position.

Change the paradigm.

The world today is a lot different from it was 40 or even a mere 10 years ago. The corporate world has evolved, and from an employee's perspective, this evolution might not have been for the better. Employers need to do better if they want to find skilled, talented workers that actually want to work at their businesses. Changing the toxic hiring practices the company uses might be a step in the right direction.

Image Credit: Prostock- Studio / Getty Images
Chris Porteous
Chris Porteous
business.com Member
See Chris Porteous's Profile
I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge, Entrepreneur.com, Forbes, Inc.com, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.