Why Small Firms Can Win the Coming Talent War

Key Concept ~ I read an interesting article in the Wall Street Journal the other day that revealed a remarkable level of stupidity being practiced in business.  In the article, “Software Screening Rejects Job Seekers“, Wharton School professor of management and human resources Peter Cappelli shared his insights into the jobs market and the implications today’s hiring procedures have on attracting and recruiting talent.

We’re hearing it all the time now.  Companies are continuously complaining that they can’t find the talent they need to fill open jobs.  Professor Cappelli decided to look into this situation and came up with the following conclusion; “The real culprits are the employers themselves”.  While the recession empowered employers to be exceptionally picky in their selection of job applicants another factor is at play; screening software is now used by major corporations in the hiring process.  Once again we see corporations running to technology to attempt to solve a human-centric challenge…looking out there for the solutions to today’s competitive challenges rather than being a bit more self-reflective and looking within for the answers.  And simply put, it doesn’t work.

In his upcoming book, “Why Good People Can’t Get Jobs”, Professor Cappelli reveals some striking examples of just how dysfunctional the hiring process has become.  One HR executive told him that, just as an experiment, he anonymously applied for an opening in his company.  He didn’t get through the computer screening process.  In addition, he witnessed managers piling on requirements to the point that nearly nobody on the planet would meet their expectations.  Another example of the mind-numbing stupidity being played out in corporate hiring environments is a company that received 25,000 applications for a basic engineering job.  The HR department reported that no qualified job seekers applied for the position.  Really?  One engineer reported that he was told that his background was perfect except for one thing; his last title didn’t match the title of the position in the company. A title which was unique to that company.  Worst of all, the vast majority of job seekers never have the opportunity to engage with a human being in the application process.

Now, for many, many years I’ve witnessed the hiring process being driven by risk-aversion.  Companies tend to hire the person that is least likely to fail rather than the one that is most likely to succeed.  It’s the equivalent of playing not to lose, rather than playing to win.  But what we’re seeing now makes that behavior look remarkably progressive.  The professor also points to the need for greater investments in education and training, on the part of the employers, to meet their shifting needs.  The mindful investment in human beings is mission critical in today’s economy.  Organizations must become learning organizations. in order to stay competitive.

While this trend is bad news for job seekers, it is excellent news for small, entrepreneurial firms.  The myopic approach of large companies is missing out on great talent simply because they didn’t formulate their resume with the proper keywords.  This is another example of the Industrial Age mindset still dominating Corporate America.  People are more than their resume.  Character, creativity, inter-personal skills and emotional intelligence are difficult to communicate on a one page resume.  These intangibles, that are proven to be the key drivers of success, are only revealed through relationship.  By meeting, or at the very least, speaking with a potential candidate.

Big companies have long enjoyed intrinsic advantages over smaller competitors.  This remarkable misstep opens the door to a more level playing field.  In the 21st century, talent will be the deciding factor on who wins and who loses.

© 2012, Terry Murray.