Hire and Inspire. A New Approach to Graduate Recruitment
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- Angela Fitzgerald
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1 Hire and Inspire A New Approach to Graduate Recruitment 1
2 Hire and Inspire A New Approach to Graduate Recruitment Canada 1 in 4 graduate positions not filled A Perfect Storm for Graduate Recruiters US 1 in 6 hiring managers think students have the skills and knowledge they need Events are coming together to make this a really tough time to be recruiting graduates. Nobody seems to be happy. Line managers are not happy with the employability of newly hired graduates. Senior managers don t believe the current crop of graduate hires will be the leaders of tomorrow and even the graduates you recruit aren t happy and are likely to quit their job after only a few months! All this means you, as a recruiter, can t possibly be happy. There is a new approach to graduate recruitment that can satisfy the needs of recruiters, graduates and all the other stakeholders. It will require you to make significant changes in the way you work. And you will have to challenge established ideas and ingrained habits. The Challenges Facing Recuiters Organisations are not filling all their graduate vacancies Graduates are not happy with the recruitment process and drop out or leave early Line managers are increasingly dissatisfied with the employability of graduate recruits Senior managers are concerned that graduates either don t have leadership potential or don t stay long enough to become leaders. 2
3 UK 7 in 10 employers think that students need to do more to prepare themselves for work Middle East Graduate hires lack soft skills in areas such as communication and teamwork India & China Only 1 in 6 employers say graduates have what they are looking for South Africa Students with technical degrees in short supply and many emigrate Figure 1: Employers Locally and Globally are Struggling to Fill Their Graduate Vacancies Failure to Fill the Vacancies Not Just a Local Problem There is a worldwide problem for people like you who are trying to recruit graduates. Despite the growing pool of available candidates recruiters can t find the graduates they want. At least not the ones they think they want and certainly not by using conventional methods. A recent survey by the Association of Graduate Recruiters (AGR) reported that in Canada, 1 in 4 graduate vacancies weren t filled in 2012 and around 9 in 10 organisations in the UK have unfilled graduate vacancies. The reasons vary around the world from UK employers thinking students are unprepared, to shortages of technical skills in South Africa. But the story is the same everywhere employers cannot satisfy the need for the right sort of graduate recruit. 3
4 Confused and Unhappy Graduate Recruits Most graduates don t really know how or where to look for jobs. They don t know what to expect from an organisation, they don t really understand what the job entails when they apply or they apply for jobs they are not interested in. Not surprisingly, many want to leave soon after they have started. In fact, 1 in 4 graduates are likely to leave their first employer within 12 months and that doesn t include the ones who have dropped out of the selection process or accept an offer and subsequently don t start. The trouble is, most recruiters don t really know what graduates want or how to reach out to them. 1 in 4 graduates are likely to leave their first employer within 12 months Understanding What Makes Graduates Tick We know from our research that graduates have these five goals in their first job in this order: A desire to achieve career goals Opportunities to learn, develop and grow The opportunity to demonstrate talents and shine against others Recognition for doing a good job and making a strong contribution Material reward, salary and broader financial benefits 4
5 Graduate recruiters need to ensure they are mapping their offering to the wants and needs of today s graduate. That may mean recruiters need to take a long hard look at their recruiting shop window the Employer Value Proposition (EVP). Graduates need to be persuaded that the organisation is the right place for them, and somewhere they will prosper. Can t We Just Pay Them a Bit More and Get the Ones We Want? It s not all about money, though this will vary depending on where you are. Some recruiters may well have to pay a high price for the right talent, as this interviewee from the Middle East admits: We have little choice but to pay a premium for graduates in our region. If we don t, they will simply go elsewhere, and that premium is rising all the time. US Europe Africa Asia Oceania 1 Progression Personal Growth Ease & Security Status Progression 2 Competition Progression Status Competition Competition 3 Material Reward Recognition Progression Ease & Security Progression 4 Personal Growth Competition Competition Commercial Outlook Fear of Failure 5 Fear of Failure Achievement Recognition Immersion Recognition Figure 2: What Graduates Want Most Depends On Where They Are 5
6 Line Managers Are Not Happy with Graduate Employability Even when recruiters find what seem to be the right graduates, line managers are often not convinced. In China, India and the US only 1 in 6 hiring managers think graduates have the skills and knowledge they need, and in the Middle East graduate hires lack competences such as communication and team working skills. It s hardly your fault as a recruiter, but you are expected to fix it anyway. There is a clear gap between employers and educators in perceptions of what today s graduates have to offer the world of work. So much so that Peter Cheese, CEO of the UK s Chartered Institute of Personnel and Development (CIPD), comments: When it comes to recruitment, it can feel as though young people and employers are on completely different planets. Too many young people are struggling to find their first job, whereas many employers are finding it difficult to get the skills they want. Only 1 in 6 hiring managers think students have the skills and knowledge they need 6
7 Find out what graduates want from you. Work out what your organisation wants from graduate hires. Link them together.
8 So What Are Employers Looking For? What exactly do we mean by employability? The National Association of Colleges and Employers (NACE) surveyed 244 US employers in 2013 and identified the following top ten skills required of graduates: Figure 3: Nace Top 10 Skills and Qualities Ability to verbally communicate with persons inside and outside the organisation Ability to work in a team structure Ability to make decisions and solve problems Ability to plan, organise and prioritise work Ability to obtain and process information Ability to analyse quantitive data Technical knowledge related to the job Proficiency with computer sofware program Ability to create and/or edit written reports Ability to sell or influence others These are largely softer skills or competencies that can be developed into specific job skills later. So is it realistic to look for graduates with fully formed skills? Or should you be looking for the underlying potential to develop? Or maybe something in between? 8
9 Graduates value opportunities to learn, develop and grow.
10 To help answer this, we mapped NACE s list of top skills and qualities onto our Universal Competency Framework (UCF). The UCF covers 20 behavioural dimensions critical to effective performance at work as identified through research with organisations worldwide. Figure 4 shows what the results looked like. Then we added two more very important attributes, Adapting & Responding to Change and Achieving Personal Work Goals and Objectives, with some very interesting results. Adapting & Responding to Change This is one of the most important competencies for the workplace today and in the future. The capacity to embrace and leverage change is increasingly critical to effective performance. Achieving Personal Work Goals and Objectives An employee s competencies will only be realised when he or she directs them to achieving a goal or objective. This also applies to the opportunities provided by employers to develop and to pursue career goals, which we will come to later. 10
11 NACE Top 10 maps to......this UCF Behaviour Potential Outcome Ability to verbally communicate with persons inside and outside the organisation Presenting & Communicating Information Engage Ability to work in a team structure Working with People Engage Ability to make decisions and solve problems Deciding & Initiating Action Engage Ability to plan, organise and prioritise work Planning & Organising Execute Ability to obtain and process information Learning & Researching Execute Ability to analyse quantitive data Analysing Execute Technical knowledge related to the job Applying Expertise & Technology Execute Proficiency with computer software programmes Applying Expertise & Technology Execute Ability to create and or edit written reports Writing & Reporting Engage Ability to influence others Persuading & Influencing Engage Figure 4: Mapping The Nace Top 10 to The Universal Competency Framework (UCF) 11
12 What Makes a Successful Graduate Hire? These behavioural dimensions (or underlying dimensions of potential) can be grouped into two clusters: the potential to execute effectively or get things done and the potential to engage effectively with others. To help summarise how this all comes together and connects to performance, we have created an Employability Model, which as you can see in Figure 5, shows how competencies that you identify at the point of hiring can be developed into specific skills vital to the workplace. Can We Predict the Future? Not exactly, but we have a pretty good idea of what recruits are likely to achieve. And this is the most useful tool a recruiter can have a set of reliable predictive indicators. We have carried out 6.6 million assessments in six years across 29 organisations in Asia, Africa and the Middle East, as well as the UK and the US, for supervisory and managerial roles. In most cases we know what those people went on to achieve. 12
13 Achieving Personal Work Goals creates the momentum for action Planning & Organising enables timelines and resources to be aligned to goals and priorities Ex Executee Learning & Researching enables understanding of issues, problems and options People higher on the potential to execute are 6 times more likely to be rated as a top performer Analysing and Applying Expertise and Technology enables sound judgements and workable solutions Deciding & Initiating Action creates a sense of shared responsibility for outcomes Adapting & Responding to Change enables more effective responses to events Ex Engagee Presenting & Communicating enables clarity about actions and priorities People higher on the potential to engage are 4 times more likely to be rated as a top performer Working with People demonstrates a commitment to collaboration Figure 5: How the Employability Model Relates to Performance in the Workplace 13
14 We re-analysed this data using the Employability Model that you can see in Figure 6. We found those who showed potential to execute or the potential to engage with others were more likely to be rated highly for executing tasks and for engaging others effectively. Those in the top of our metric for the potential to execute effectively are 5.7 times more likely to be rated as upper quartile for their performance in executing tasks. Those at the top for the potential to engage others effectively are 3.6 times more likely to be rated as upper quartile for their performance in engaging others. Figure 6 sums up these factors. More likely to be rated as upper quartile for their performance in executing tasks More likely to be rated as upper quartile for their performance in engaging others 14
15 Upper Quartile Strong on potential to execute but need development in the potential to engage effectively High on the potential to execute tasks and engage others Execute Broader development needed to raise benchstrength Strong on potential to engage but need development in the potential to execute effectively Upper Quartile Engage Figure 6: Segmentation of Graduate Talent and their Potential to Execute and Engage Effectively 15
16 Senior Managers are Not Happy with the Long Term Potential of Graduate Hires You can see we now have a model that allows you to identify who has the potential to do a good job, even if they don t have those skills on day one. In short, someone who is employable. But does this mean these hires have what it takes to be the high-potentials that senior managers want to see coming through the organisation? We don t know at this stage. But we can find out and it s important for you to know, because you have to satisfy the short term needs of line managers and the longer term needs of the organisation. And don t forget the needs and aspirations of those graduates you want to hire. So the approach we have developed is about meeting the needs of all these stakeholders. The Added Challenge of Globalisation As if things weren t tough enough right now, you should know that there are issues arising globally that will increase the challenges for graduate recruiters everywhere. 16
17 Survey results from the Organisation for Economic Co-operation and Development (OECD) show that the number of international students enrolling in courses outside their country of origin has doubled in the past decade. This amounts to around 4.5 million tertiary students, with Australia, the UK and the US clear favourites for study abroad. A lot of these students 1 in 5 look for work in the country where they have studied. With around half of these students coming from Asia, these migration patterns have an impact on graduate talent pools in the country of origin as well as the country where they want to work. All this means that for most graduates and most companies, national borders are irrelevant. To win this worldwide battle for graduates, recruiters need to think globally but act locally. 1 in 5 graduates look for work in the country where they have studied 17
18 Developing a New Approach We have already seen that those on the Execute and Engage metrics are more likely to be rated highly for their future performance as employees. So you can just hire the people who show these characteristics, whatever the cost easy! Not as easy as you might think. What are the odds of finding that level of graduate talent? As shown in Figure 7, those odds are 15 times lower than a more pragmatic approach. Simply put, the odds of success from pursuing a graduate buy strategy will be low for many organisations. 18
19 Upper Quartile Buy-and-Build 1 in 4 1 in 15 Buy Execute Build 1 in 1 1 in 4 Buy-and-Build Upper Quartile Engage Figure 7: The Odds Are Low For Recruiting Graduate Talent Using a Buy Strategy 19
20 Buy-and-Build You can beat those odds by hiring graduates with known strengths, as long as you are prepared to invest in those areas you know will need development. And remember, this is what graduates say they want. As we set out above, our research revealed that the top 3 things graduates want are to achieve career goals, have opportunities to learn and develop, and the chance to demonstrate talents and shine against others. If we look at the top left and bottom right sectors in Figure 7, we know that these quadrants offer talent that will translate into effective job performance almost 6 times more likely if they are strong on execute and almost 4 times more likely if they are strong on engage. As Figure 8 shows, the odds of finding graduates that are strong on execute or strong on engage, are much higher than for finding people who are strong on both. In fact you are 7.5 times more likely to find the levels of graduate talent. 1 in 15 1 in 2 VERSUS If your focus is Buy If your focus is Buy-and-Build Figure 8: The Odds are Higher for Finding Graduate Talent that Satisfies a Buy-and-Build Strategy 20
21 Make sure your recruitment plan links potential to real employability.
22 You have to know the talents you have bought and the talents you need to build, or develop, to make sure you can satisfy the short term needs of line managers and the long term requirement for future leaders. So is that it? A buy-and-build strategy is the way forward? Figure 9: Different Strategies Will Be Effective in Different Sectors Buy & Build Strategy Odds Weaker Stronger Buy-and-Build more effective Oil and Gas Healthcare Engineering Utilitie Public Sector Mining Build for tomorrow Insurance and Financial Services Banking Travel and Leisure Business Services Telecoms Food, Beverages and Tobacco Consumer Goods (Heavy) Either strategy works Professional Services Technology Retail Consumer Goods (Light) Buy strategy may work for today Weaker Buy Strategy Odds Stronger 22
23 Unfortunately the answer to that is it depends. It depends on the sector you are in and the part of the world you are in. And whether you are an a multinational company (MNC). Firstly you should look at how the odds of success vary by industry sector. Then you need to consider the effect of geography. Figure 10: Different Strategies Will Be Effective in Different Geographies Buy & Build Strategy Odds Weaker Stronger Buy-and-Build more effective Singapore New Zealand Australia Finland Ireland Malaysia China France Spain Belgium Italy UAE South Africa Egypt Portugal Saudi Arabia Philippines Poland Taiwan Indonesia Build for tomorrow UK Hong Kong Norway India Greece US Either strategy works Netherlands Denmark Germany Sweden Turkey Canada Buy strategy may work for today Weaker Buy Strategy Odds Stronger 23
24 The Old Established Ways to Fail and Some New Ones Here is a selection of the sort of things said by recruiters who adopt, often without success, familiar models of campus recruitment. We have a long tradition of recruiting from University X These universities get the best academic ratings, so that s where we go to find the best talent We like to pitch at universities that we have not explored before so we can keep our search for talent fresh Our line managers and seniors like us to focus on where they went as they have clearly been successful in their careers Our research shows that this kind of approach often fails, with only 1 in 3 graduates hired by an employer with a strong campus presence. Neither is it a good idea to place too much trust in your employer brand. Fewer than a half of graduates say they apply for a job based on strong brand or reputation alone, which calls into question the investment made in Employer Value Propositions (EVPs). So it s clear investments made by many organisations in traditional ways of attracting graduate talent are not delivering the dividends those organisations expect. 24
25 Is Social Media the Answer? In 2013, 94% of recruiters said they intended to use social media to recruit graduates, and 82% of organisations planned to increase their social media usage. Yet, while 2 out of 3 recruiters consider themselves competent in the use of social media, only around 1 in 3 recruiting executives see the use of social media as effective. Organisations are failing to use social media effectively because they lack critical talent intelligence and don t always understand what makes graduates tick. Companies we surveyed typically spend 24% of their employer branding budget on social media, but only 5% of those budgets are spent on employment branding research and measurement. This will have a critical impact on your EVP, and can also be used to formulate a well-informed social media recruiting strategy. Use of Social Media Up But Impact Remains Low......Reflecting the Need to Reprioritise Branding Spend Recruiters planning to use social media 94% Companies with an employment brand specialist 77% Organisations increasing the use of social media 82% Proportion of branding spend on social media 24% Recruiting executives confidence in the effectiveness of social media 37% Proportion of spend on 5% research and measurement Figure 11: Without the Right Research, Low Confidence in Social Media Shouldn t be Surprising 25
26 It s Not the Medium It s the Message that Matters With so little effort being made to find out what motivates graduates it s hardly surprising that communication fails so often. You might as well be speaking different languages. And not spending money on researching how graduates think just costs you money later. Our research shows that recruiters who get their EVP wrong pay 21% more to hire each new employee. And the costs of getting the EVP wrong keep racking up. Graduates who join you because they want to, rather than because you pay better, work harder. In fact for every 10% increase in commitment they will work 6% harder and be 2% more productive. For every 10% increase in commitment... They will work 6% harder... And become 2% more productive 10% 6% 2% Figure 12: 10:6:2 Rule Will You Get the Best People to Apply if You Offer these Opportunities Rather Than High Salaries? We found that graduates in the buy segments rated material reward out of the 18 factors we studied and in the buy-and-build segment 9th. The lesson to take away is you don t have to pay as much for your graduates if your EVP is right. Put simply, you do not have to pay a premium for graduates who are motivated to work for you. 26
27 All Graduates Buy Buy-and-Build 1 Progression Personal Growth Progression 2 Personal Growth Progression Personal Growth 3 Competition Competition Competition 4 Recognition Achievement Fear of Failure 5 Material Reward Fear of Failure Achievement Material Reward Ranks 15th of 18 Material Reward Ranks 9th of 18 Figure 13: Motivational Factors by Key Graduate Talent Segments Be Realistic About What Graduates Really Know Two thirds of graduates spend 5 hours or less researching your company and you have to make sure they understand what they are going to be doing when they start work, plus what opportunities are there for them. This is where the role of a Realistic Job Preview (RJP) comes in. 27
28 This approach uses a range of multimedia techniques that help applicants understand what the job is really like and provides an insight into the culture of your organisation. These should be based on a careful behavioural analysis of the motivations of the graduates you want. In Short Start by analysing what graduates really want. Then create a realistic view of the job and the organisation. This will increase applications from the sort of graduates you want, who are less likely to drop out of the process or leave early and who work harder when they are on the job. It s All About Analysing the Data They say that data is the new oil. It s incredibly valuable, but only if you can find it and refine it. The most valuable thing it can give to recruiters is predictive analytics. You may already have a lot of that data. HR systems such as a Talent Management System (TMS) often include valuable information on the people in your organisation; their characteristics, their competencies and how they are performing against the goals of the organisation. The next step is to take that data and use it to identify the characteristics you are looking for in graduate recruits, generally, and for specific roles. Then express them in the form of detailed job descriptions. This will significantly help in your search for the right graduate recruits. But there is an even bigger opportunity. 28
29 By rethinking your approach, you can take the first steps towards building a workforce that doesn t just represent the best available talent, but is also inspired to succeed.
30 Hire and Inspire Seamlessly Connecting Recruitment and Ongoing Development So far we have only looked at attracting and then hiring the right applicants. What about the ones who leave early? Again, you might argue that that is not the recruiters problem but it is in part and you can use this approach to resolve it. The high numbers of recruits who leave early do so because the job doesn t match up to their expectations expectations you have set. You can stop these candidates from walking by integrating recruitment (your EVP, RJPs, etc.) with onboarding, ongoing talent management and even your high-potential programmes. That way you make a promise, they accept it, you deliver on it and they stay. The Talent Advisor You may well have the skills to do this sort of analysis; our research shows a lot of people in HR departments do. But some organisations are creating a new role, that of the Talent Advisor. This is someone with strong statistical and analytical skills who can talk to recruiters, line managers and senior managers about how the right recruitment and continuous development strategy will meet all the needs of the organisation. So they can find and hire people who will perform well from day one, then stay with the organisation and go on to fill senior roles. Hire and Inspire If you want to hire and inspire, bear in mind that your graduate strategy is not limited to recruitment; the elements go hand in hand at every stage. Potential graduate recruits have to be inspired by your EVP to apply to your organisation. Once they start they need to be inspired by the training and opportunities you give them to become the employees you need. This will inspire confidence in your line managers. 30
31 And the recruitment process has to be seamlessly linked to High-Potential (HiPo) programmes designed to retain and develop the leaders of tomorrow who will inspire senior managers. This new approach is a challenge for recruiters, but as we have seen above, the old ways are not effective and global factors will continue to add to the problem. Because this new approach is data-led, the quality of your data and the way you analyse it is critical. But it is an approach, not a single solution that will fit every organisation. Based on how successful you are you can refine the approach or change it radically to adapt to new demands from your organisation. Because the approach is intelligenceled you will always be able to see how it is performing and make changes to suit your business needs and graduate pipeline. By rethinking your approach, you can take the first steps towards building a workforce that doesn t just represent the best available talent, but is also inspired to succeed. 31
32 CEB is the leading member-based advisory company. By combining the best practices of thousands of member companies with our advanced research methodologies and human capital analytics, we equip senior leaders and their teams with insight and actionable solutions to transform operations. This distinctive approach, pioneered by CEB, enables executives to harness peer perspectives and tap into breakthrough innovation without costly consulting or reinvention. The CEB member network includes more than 16,000 executives and the majority of top companies globally. ceb.shl.com 2014 SHL, a part of CEB. All rights reserved. SHL Group Ltd. Registered in England. GraduateEbook UKeng-UK
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