Employers getting picky at hiring time

The right fit is becoming more important than a fast hire

Despite pressure to hire quickly in a tight labour market, HR departments are showing signs they won’t be rushed into hasty decisions.

“There’s still a very buoyant market, but people are more selective about hiring today,” says Denis St-Amour, president of the outplacement firm Drake Beam Morin-Canada Inc, adding that hiring activity peaked two years ago.

“It’s still a hot market, but the frenzy has gone. Some companies hired so many people so fast that they made a lot of mistakes. They hired people they normally wouldn’t have hired. They’re more selective now, they’re looking for people who have the potential to continue growing in the business,” he says.

St-Amour points to his firm’s recent North American survey on employment trends that indicates organizations are becoming increasingly concerned about the costs of bad hiring decisions, and thus more willing to take their time finding the right fit.

A recent survey of 718 employers across Canada by human resources consultants Murray Axmith and Associates concurs. The study shows hiring and dismissal rates have declined “substantially.” Organizations reported hiring one-third as many staff in 1999 than they did in the firm’s 1997 survey.

St-Amour estimates a 10 to 15 per cent decrease in hiring compared with two years ago.

“In the last 18 months, the emphasis has been on hiring the right people.” Fit has become much more important, companies want to invest in an individual who will stay with the firm. The high costs of hiring and training employees are major factors, so companies want to keep their employees longer. St-Amour likens hiring employees to driving a car: “Five years ago the rate of hiring was about 50 to 60 miles per hour, two years ago it rose to 110, and now it’s about 85 miles per hour.”

And, many employers seem to be keeping employees they once would have dismissed. Murray Axmith survey respondents report firing is down 20 per cent from 1997.

“Fewer people are being let go because good people are hard to get,” says St-Amour. “Many companies might like to let someone go, but ‘better the devil you know than the devil you don’t know.”

John Hamilton, the national co-ordinator of the Murray Axmith survey, has conducted the poll since its inception 12 years ago. Although “surprised” that the results show a decline in hiring, Hamilton says it gives a good representation of the way human resources professionals see the field.

Not surprisingly, firms report difficulty in hiring information technology and professional technical employees. Recruiting executive and senior management employees is also a problem, with two-thirds (67 per cent) saying they had difficulty in finding leaders.

Sixty-five per cent of employers claim their toughest competition for talent is from direct competitors. The survey states that employers did not report evidence of a brain drain to the U.S.

The survey also indicates a rise in the use of executive search firms for hiring executives and managers or supervisors. Their use for all levels of hiring is up from 1997. St-Amour says executive search firms are better placed to evaluate and analyze potential candidates, especially at more senior levels. “People in many companies don’t do a lot of this.”

Employers are also considering younger applicants more often than before, but aren’t doing the same for older applicants. “A lot of companies will hire bright young lights because they come with less corporate baggage,” says St-Amour. But there can be a price to hiring younger people: “They often don’t have the maturity and corporate sensitivity needed.”

But any aversion to hiring older workers may soon disappear. Murray Axmith predicts “in future years, with the baby boom passing through the labour force, talent will become scarcer still, and employers will be under pressure to consider older applicants. This pressure is not yet being felt.”

Despite more cautious hiring practices, the job market is still strong. According to the survey, the trend towards hiring defined-term employees continues to be positive, although it’s not as pronounced as it was. Forty-one per cent of employers expect an increase in the next two years, while only 14 per cent foresee a decrease.

Ann Macaulay is a Toronto-based freelancer writer.

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