4 Factors (Besides Skills Shortage) That Are Causing Record Hiring Decision Delays

The latest statistics on hiring are very encouraging for recruiters on both the direct hire and contract staffing side of the business. But there is one recent statistic that is not good for anyone in the employment arena. The time-to-fill open positions has reached an average of 25.1 days, the longest period since that statistic first began being tracked in 2001, according to the Washington Post.  When the recovery first began in July 2009, that number was at 15.3 days.

This record was hit even though there are 9.5 million unemployed individuals available to fill approximately 4.6 million open jobs. Not to mention all of the currently employed people who are actively looking for new jobs, a number that is growing as the economy improves. So what is behind these hiring decision delays?

Many experts and recruiters point to a mismatch between the skills that available workers have and those that are needed. This is definitely true for certain positions and industries. However,  as Catherine Rampell notes in the Washington Post, if a skills mismatch were a widespread problem, we would see an overall increase in wages as companies compete for the small number of qualified individuals.  That is not happening. Additionally, when the four regional branches of the Federal Reserve and former chairman Ben Bernanke looked into the issue, they could not verify that there was a bonafide skills crisis,  stating that “current skills mismatches are limited,” Inc.com reported.

It appears that there are a number of other potential factors causing hiring decision delays:

  1. Economic uncertainty – The economy is getting better, but it’s still not out of the woods.  A number of issues, including political disputes, the expected turnover in Congress due to the November Elections, and the unknown impact of the Affordable Care Act (ACA or Obamacare) are leaving employers less than confident about hiring, especially with the recession and its massive layoffs still fresh in their minds.
  2. Increased employment regulation – In addition to the ACA, employment legislation has increased on the federal, state, and even local level.  A prime example: A number of states and localities are passing paid sick leave laws. Employers have to determine whether they must comply with these laws, how to administer and track the leave, and how to cover the costs. The regulatory burden weighs on employers’ minds every time they consider adding to their staff.
  3. Reluctance to hire long-term unemployed – The “unemployed mindset,” in which employers assume there is something wrong with a candidate who is not actively employed, is alive and well. This is especially true when it comes to the 3 million people considered to be “long-term” unemployed, meaning they have been out of work for 27 weeks or more. Citing data from an Evolv study, Bloomberg reported that callbacks for those with 8 months of unemployment is 45% lower than those out of work only a month.
  4. Search for the “perfect” candidate – When they have to hire, companies seem to be seeking the proverbial “purple squirrel.” According to Inc.com, 67% of hiring managers said they “don’t feel like they have to settle for a candidate without the perfect qualifications.”  They are disqualifying candidates for things as simple as not having the exact years of experience requested or missing certain “buzzwords” from their resume. It is not uncommon for candidates to go on several interviews and still not be hired. Recruiters have also reported that clients are continually asking for more options even after quality candidates have been presented.

This failure to act can cause more problems than it solves. As a recruiter, you know that quality candidates start to drop out of the hiring process the longer it goes. You may have so many applicants that you employ the use of online recruiting software to help manage candidates and job orders, but positions aren’t being filled. Also, failing to hire hampers the growth of the company. Finally, the shortage of help can put undue stress on existing employees, which can impact productivity and retention.

You can help clients avoid these problems by offering candidates on a contract basis.  This can help in a number of ways.  If they are concerned about the cost and administrative burden tied to employees, they can instead utilize contractors, who are the legal employees of a third party (you as the recruiter or an outside provider of recruitment back-office solutions that you utilize). The third party takes on the role of employer of record assumes the responsibility for legal compliance. If they are uncertain of the economy, they can use the person on a contract basis and convert them to a direct hire when they feel more secure.

Contract-to-direct arrangements can also help clients ensure a good fit in the absence of the purple squirrel. They can evaluate the workers’ performance and work ethic during the contract period and then decide whether or not to extend the direct hire offer.  Some recruiters we work with actually have clients who are utilizing the contract-to-direct option to evaluate most of their new hires.

Dragging out the hiring process is not good for you, your clients, or your candidates. You can help reduce the time-to-hire by offering clients another option that helps everyone – contract staffing.

4 responses to “4 Factors (Besides Skills Shortage) That Are Causing Record Hiring Decision Delays”

  1. Bob Gately says:

    Hello Debbie,

    “Search for the ‘perfect’ candidate – When they have to hire, companies seem to be seeking the proverbial ‘purple squirrel.’ According to Inc.com, 67% of hiring managers said they ‘don’t feel like they have to settle for a candidate without the perfect qualifications.'”

    That is a clear indication that 67% of hiring managers are unaware of how to hire successful employees. Perfect candidates are the right people to hire about 20% of the time so even if they find five perfect candidates they’ll hire the wrong one 4 out of 5 times.

    Employers need to hire competent applicants who fit their culture and who have the talent for job success.

    80% of employees self-report that they are not engaged.
    80% of managers are ill suited to effectively manage people.
    The two 80 percents are closely related.

    Successful employees have all three of the following success predictors while unsuccessful employee lack one or two and usually it is Job Talent that they lack.
    1. Competence
    2. Cultural Fit
    3. Job Talent 

    Employers do a… 

    A. Great job of hiring competent employees. 

    B. Good job of hiring competent employees who fit the culture. 

    C. Poor job of hiring competent employees who fit the culture and who have a talent for the job. 

    Identifying the talent required for each job seems to be missing from talent and management discussions. If we ignore any of the three criteria, our workforce will be less successful with higher turnover than if we do not ignore any of the three criteria.
    1. Competence
    2. Cultural Fit
    3. Talent

    There are many factors to consider when hiring and managing talent but first we need to define talent unless “hiring talent” means “hiring employees.” Everyone wants to hire for and manage talent but if we can’t answer the five questions below with specificity, we can’t hire or manage talent effectively.
    1. How do we define talent?
    2. How do we measure talent?
    3. How do we know a candidate’s talent?
    4. How do we know what talent is required for each job?
    5. How do we match a candidate’s talent to the talent demanded by the job?

    Most managers cannot answer the five questions with specificity but the answers provide the framework for hiring successful employees and creating an engaged workforce.

    Talent is not found in resumes or interviews or background checks or college transcripts.

    Talent must be hired since it cannot be acquired or imparted after the hire.

  2. I am torn whether I should laugh or cry at this.

    Where is the courage? Where is the boldness? Where is the compassion and humanity?

    What these four points – being paralyzed about the economy, etc. – point to are two things:

    1. A total lack of any risk-taking. Instead, it seems hiring managers are cowering in their offices, waiting for a “sure thing” to be cranked out by the Acme Candidate Factory instead of hiring someone with demonstrated ability and training for that last 10%. Rather than boldly moving forward to outpace the competition, they seemingly hide in their offices, afraid to take a step lest it look bad. This is not the attitude of a leader; it’s a cringer.

    2. A total lack of any compassion or empathy. Do they not have the capacity to understand they, too, might be let go? That in today’s environment of millions – tens of millions depending on whom you listen to – of people out of work, that they too might pass that magical threshold and then face the desperation of being out of work for a long time?

    And that leads to a third point, specifically, the poisoning of the workforce as an entity. People are unemployed for months if not years. People are seeing this, along with the `lack of leadership and contempt for people looking for work as demonstrated by how candidates are treated, and becoming poisoned in their attitudes towards any employers.

    Employers are poisoning their own well through their persnicketyness, lack of boldness, and lack of empathy. And then they wonder why it is employees jump ship quickly, and won’t innovate or be committed to the company.

  3. Allie says:

    If a company is that worried about who it hires…… why bother telling “outsiders” that they’re hiring at all? Times are hard for everyone. It’s even harder when an obviously successful business drags their knuckles on getting new employees processed and trained. Then the same business has the nerve to offer slightly above minimum wage. Like I said……. Times are hard for everyone.

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