Can Hiring For Potential Solve The Talent Crisis?
Recent research by Manpower Group suggests that the global skills shortage shows no signs of letting up: 34% of companies said that they are having difficulty filling open positions. Some countries are having more problems than others. For example, in Japan, 81% of companies are struggling to find talent, and in Brazil this figure is 81%. The US is doing better, but nearly 50% of companies are struggling to fill roles.
The New Normal
But, despite these increasingly alarming figures, the alarm bells are not ringing as loudly as you might expect; actually many have been turned off. This is evident from the Manpower survey which reported that 56% of respondents suggested that unfilled positions would have little or no impact on customers and investors, which is a 20% increase from 2011. It seems that business has simply become used to operating in an environment of continuous skill shortages; in fact talent shortages have become the ‘New Normal’.
This does not mean that firms are resting on their laurels; rather, they are moving from ‘panic stations’ mode in to a considered longer term process of developing strategies to overcome talent shortages. Such strategies included ‘training current staff to meet talent shortages’, and ‘ seeking staff from outside the locality’. These are very common strategies which we are all aware of. What I did find interesting was that a key coping strategy that was used by 12% of business, (making it the second most common strategy), was appointing people without the required job skills but with the potential to grow. That is ‘Hiring for Potential’
However, A PwC survey (reported in the FT last year) suggests that the climate/culture may not be right for ‘Hiring for Potential’ – and that it is being hindered by inflexible hiring practices which mean that candidates must meet rigid skills, experience and education requirements before even being considered. A PwC commentator suggested that “Job Descriptions are focused on De-selection rather than selection”, a kind of negative recruitment. I should note that there were many detractors from this viewpoint.
While the debate about the preponderance of negative recruitment rages on, I thought it would be useful to turn our attention to a case of a company whose certifiable success has been built on hiring for potential — plain and simple.
A success story in hiring for potential
A listed multinational they are not, but Fishbowl, (featured in Forbes recently), have achieved record growth (over 70% over the last three economically turbulent years) and have won regional and national awards for product and management quality and have miniscule turnover of 2% – since inception in 2001.
The beauty of the story is that Fishbowl’s success was based on a strategy of hiring potential stars, (they call them Champions) as they could not attract “superstars” (especially in the early days) and building a learning environment that encourages them to grow. Therefore to be seen as a potential star recruit at Fishbowl, candidates must exhibit 7 non-negotiable traits which are: Respect, Belief, Loyalty, Commitment, Trust, Courage and Gratitude.
Values Based Recruitment and Hiring For Potential
The Fishbowl model is an excellent example of how values based rather than skills based recruitment can help a business find potential future stars during a recession and a global talent crisis. And I do think this is an approach which could be adopted more widely and to good effect within businesses that are suffering talent shortages. However, there are three important factors that must be considered if a values based, hiring for potential strategy is to work. These are:
- Accurately profile the personality traits/values of your current superstars and put these at the core of your selection criteria for potential stars.
- Establish learning and competency goals so employees have a very clear direction in which they need to be heading from a developmental point of view. Don’t leave it to chance.
- Build a learning organization that nurtures and encourages the acquisition of skills, which might include buddy systems, mentoring systems, e-learning and self-learning.