Are companies creating their own skills gap? While much of the skills deficit in the U.S. is fueled by a sheer lack of high skill labor for in-demand occupations, a recent CareerBuilder study of more than 2,000 companies suggests that employers may unwittingly be playing a part. Half of hiring managers said that they were concerned about the expanding skills gap, and around the same amount say they limit their candidate pools by only looking at applicants with specific job titles.
In another HBR post I discussed the need for employers to stop waiting for the perfect candidate but rather create one by training a quality applicant. To take it a step further, companies must also broaden their search to be sure they aren't immediately writing off top candidates.
For example, the above survey found that 55 percent of hiring managers who have job openings for which they can't find qualified candidates reported that they typically hire people who have held the same title as the open position. Comparatively, among hiring managers who don't have an issue with filling open positions, 42 percent restrict their hiring based on previous job titles. The difference of 13 percentage points is significant, and implies that some of a company's hiring woes may be self-inflicted. Hiring managers who consider previous job titles when limiting the field of candidates are more likely to have difficulty filling openings. This is a needless limitation based on a piece of information that, in the context of hiring decisions, is essentially arbitrary.
While useful internally, many job titles are very general, and don't necessarily say much about a candidate's experience or qualifications. Industry or company size can have major impacts on employees' titles, and can be misleading to a prospective employer. Just as we said you should train people who are almost there, you need to increase your scope so that you can find as many almost-there candidates as possible.
Hiring managers are understandably cautious with their hiring practices in the wake of the recession. Human resource departments are often understaffed and under a lot of pressure to find an all-star. Because of this pressure to find the perfect hire, many openings remain open for increasingly long stretches. As Catherine Rampell points out in the New York Times, job postings are remaining unfilled for much longer today than they were just a few years ago. The average number of days a spot stays open now is 23, compared to a vacancy of only 15 days in mid-2009.
The economy's tepid recovery has made employers hesitant to take the risks inherent in hiring a new employee. This trepidation is not only hard on the applicants, but can also take a toll on the business itself. Indeed, 38 percent of companies say that their business has been harmed by extended vacancies. Of these companies, 41 cited a loss in productivity and one-in-five pointed to a loss in revenue (21 percent) or the inability to grow their business (22 percent). In an effort to find the best-fitting candidate, many hiring managers begin by skimming through work experience, specifically looking for a particular job title. But the method of filtering applications through past job titles blinds one to a wealth of potentially ideal candidates.
The focus should instead be on finding similarity between occupations based on the knowledge, skills and abilities they require. Economic Modeling Specialists Intl. (EMSI) recently ran a study using their compatibility index to illustrate this. For example, a company that needs to fill an open business intelligence analyst position is looking for someone comfortable producing financial and market intelligence, generating reports, and researching in data repositories. This is typically a vital position and ideally will not remain open long. By excluding candidates without business intelligence analyst listed as a past title, they rule out many individuals who have the relevant skills and experience required of the job.
But EMSI's index shows the company may be overlooking several nearly perfect candidates who recently held positions as market research analysts or risk management specialists and possess many of the essential skills required for the position. This extends to a wide range of professions. A tech company hiring a technical writer could also consider paralegals. A healthcare organization in need of a medical assistant could also look at pharmacy technicians. A manufacturing firm in need of a machinist could also consider an automotive body repairer.
For those who bemoan the lack of necessary skills in their current talent pool, deemphasizing the importance of candidates' job titles is an easy way to expand. For those who fear the costs of training new employees to fill skilled positions, this can help reduce the amount of re-skilling and training that goes into a new hire. In fact, re-skilling is already a very common practice, with 7 in 10 employers saying they cross-train employees within their firm. Why not do the same to mold that candidate with 5 years of experience as a database administrator into a web developer for your company?
If you can only get a job by having had that job, how can you move forward? It's a paradox that companies can help fix.