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How to Close the Skills Gap in the Manufacturing Industry

March 13th, 2017 Comments off
manufacturing skills gap

We all know examples of employers who have recruiting difficulties – you may be experiencing such difficulties yourself. To find out how prevalent these recruitment difficulties are, economists have surveyed a representative sample of manufacturing establishments. They asked plant managers to answer questions about recruitment and the skills they are seeking in a worker.

A Quarter of Manufacturing Establishments Have Hiring Difficulties

On average, establishments were able to fill positions within one and a half months. Therefore, one sign of hiring difficulties is having an unfilled vacancy for three months or more. Twenty-four percent of establishments had at least one vacancy unfilled for three months or more.

Requiring Advanced Levels of Math and Reading Skills Predicts Hiring Difficulties

As one could expect, requiring higher levels of skills can make it harder to hire. Establishments that require advanced math and reading skills increase their chance of having a vacancy that goes unfilled for three months or more by 10 percent. Surprisingly, requiring advanced computer skills does not lead to greater recruitment difficulties.

Requiring Unique Skills Also Predicts Hiring Difficulties

Some manufacturing plants require unique skills that other plants in the area do not require. These plants have an 8 percent higher chance of seeing an unfilled vacancy for three months or more.

How to Identify Workers with the Right Skills

In order to find qualified workers, hiring managers or recruiters could use CareerBuilder Search. The database uses semantic search to apply related terms – including skills, keywords and job titles – to each term searched. Using this search technology allows users to uncover talent with unique skills that traditional keyword searches may miss. Also, employers can hire workers with similar skills and train them to learn the unique skills demanded by the plant. Hiring managers should also consider relocation packages to make it easier for people with the right skills to move to their area.

Learn how to find quality candidates faster with CareerBuilder Search

Ioana Marinescu is an assistant professor in economics at the University of Chicago Harris School of Public Policy. Her research focuses on understanding labor markets. She has been collaborating on data and research projects with CareerBuilder and she is especially interested in how to get the right people to work in the right jobs. You can follow her on twitter @mioana and check out her research on her website, marinescu.eu.

How to Ensure Gender Diversity: Lessons From High-Tech Firms

February 16th, 2017 Comments off
Gender diversity

A lot of job growth is coming from small- and medium-sized firms. How do these companies fill their jobs and ensure gender diversity in the process? Are women less likely to be hired in top jobs? My fellow economists Roberto Fernandez and Santiago Campero have looked at 441 small-and medium-sized high-tech firms that use the same applicant tracking system. Thanks to their data, the researchers were able to look at the applicant pool, who got interviewed, and who got hired.

The Good News: Unbiased Interview Process
Did high-tech firms discriminate against women when inviting candidates for an interview? They did not, and this was true for both external and internal job applicants. Even more remarkably, there was no discrimination against women in top jobs either: Female applicants had as much of a chance of being interviewed as male applicants for executive-level jobs.

Less Good News: Some Gender Disparity in Hiring
Even though they had cleared the interview hurdle, women were less likely to be offered the job. Overall, because of their difficulty in converting interviews into offers, women had only 86 percent as large a probability as men to be offered a job conditional on applying. Importantly, though, this gender discrepancy was NOT more pronounced in higher-level jobs, so it did not contribute to the glass ceiling.

Lesson: Encourage More Applicant Diversity
Researchers then asked: What would help most to crush the glass ceiling? Stopping interviewers’ potential bias against women or increasing the diversity of the applicant pool? They found that decreasing the potential bias among interviewers would not improve the situation. Indeed, 46 percent of entry-level job candidates are female, and only 28 percent of executive-level job candidates are female. This means that, even if interviewers were unbiased, they would be about half as likely to pick a woman for an executive-level job than for an entry level job. Instead, to ensure gender diversity, it may be useful to encourage more women to apply to high-level jobs. Because 73 percent of hires in these companies come from external sources, efforts to locate good potential candidates are especially useful.

Find out how to find the right candidates faster with CareerBuilder Search

Ioana Marinescu is an assistant professor in economics at the University of Chicago Harris School of Public Policy. Her research focuses on understanding labor markets. She has been collaborating on data and research projects with CareerBuilder and she is especially interested in how to get the right people to work in the right jobs. You can follow her on twitter @mioana and check out her research on her website, marinescu.eu.

Why You Should Reward Your Team Players

January 31st, 2017 Comments off
Reward team players

Are some of your employees adding more value to the team? Are you paying attention? Or are you only focusing on individual performance? Research on toxic workers shows that good team players are extremely valuable and avoiding toxic hires is key.

Once you have hired some good team players, you should reward them. Alas, many employers do not reward team players enough. A great example is from professional basketball. My fellow economics researchers Petere Arcidiacono, Josh Kinsler and Joseph Price have looked at the data to find out who the best individual players are, and who contributes the most to team success. What can we conclude from their work?

An excellent team player adds 60 percent more value to the team than a selfish player. When looking at basketball, researchers have crunched the data to figure out how much each player is contributing to team success. Each player obviously contributes their own direct talent, which is what a purely selfish player would contribute. But an excellent team player further adds 60 percent additional value to the team, by making strategic passes to teammates for example. Suppose you add two excellent team players: This is like adding more than three people to the team.

The best individual contributors are not always the best team players. The beauty of measuring both individual and team contributions is that we can rat out the selfish players. And researchers indeed find out that some players, while excellent on their own, do not contribute so much to the team. Among top players, Carmelo Anthony is not a good team player relative to Chris Andersen.

Compensation mostly ignores team contribution. Finally, researchers looked at how basketball players were paid. Was their team contribution acknowledged? Surprisingly, great team players don’t get paid much more than similarly talented selfish players. Professional basketball does not reward team players. Incentive matters, so it is likely that everyone’s efforts for the team would be enhanced if team players were better compensated.

Don’t make the same mistake as the NBA: Reward your team players!

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The Benefits of Algorithmic Candidate Recommendations

November 29th, 2016 Comments off
Algorithmic recommendations

Do you have a hard-to-fill job? Not enough qualified applicants? You could search through a candidate database. Or, even better, save yourself the work and rely on algorithmic candidate recommendations. This is the message from a newly published paper in the Journal of Labor Economics by my economist colleague John Horton, from New York University’s Stern business school.

Algorithmic recommendations can increase the job filling rate by 20 percent

John collaborated with the ODesk (now Upwork) online work platform to do some experimentation in 2011. Employers were randomly assigned to a control group (business as usual) and to a treatment group (algorithmic recommendation). Without the recommendation, employers can either look at candidates who applied to their jobs, or search candidates on the ODesk database. With the recommendation, employers got up to six candidate recommendations based on their job opening. Employers with technical jobs (e.g., web programming and mobile development) typically had a hard time filling their vacancies, but the job filling rate was 20 percent higher for those who saw candidate recommendations.

Interestingly, candidate recommendations did not dissuade employers from hiring other non-recommended workers. This shows that candidate recommendations were not duplicating employer efforts, but were a real value added to employers.

Algorithmic recommendations are especially effective for jobs with few applicants

It is interesting that, in the ODesk experiment, algorithmic recommendations only had an effect for technical jobs and not for nontechnical jobs. When digging deeper into the data, John found that part of the difference could be explained by the fact that nontechnical jobs already had plenty of applicants. It is for the hard-to-fill technical jobs that the algorithmic recommendations were more effective, increasing job filling rates.

Recommended candidates are as good as employer-sourced candidates

When comparing recommended candidates and those sourced by the employer themselves, John found that recommended candidates were just as skilled and performed just as well on the job. Therefore, employers can rely on algorithmic recommendation to do at least as good of a job as themselves when sourcing candidates. This is especially remarkable given that the recommendation algorithm used at the time of the experiment (2011) was quite simple, and more recent algorithms are much more sophisticated.

For example, CareerBuilder now has a Talentstream match product that uses advanced natural language processing techniques to match jobs with the most suitable candidates. The product is currently available to staffing companies and other companies that use the Bullhorn ATS. The search engine allows employers to search not only in their candidate database but also across other sources like LinkedIn. Furthermore, search can be refined by specifying the relative importance of different skill requirements.

In conclusion, if you regularly find yourself with hard-to-fill jobs, you could benefit from algorithmic candidate recommendations.

Get in touch with your sales representative to learn more.

 

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Why Multitasking is an Employee Productivity Killer

November 11th, 2016 Comments off
Why multitasking is a productivity killer

Imagine you are currently working on filling one particular job posting. Your mind wanders and you are tempted to check the number of applicants you got for another job posting. Should you resist the temptation? Research suggests that, as a general rule, you most definitely should! Multitasking kills productivity.

Want to finish projects faster? Do them one at a time.
So suppose that finishing Project A takes one week if you concentrate on it, and Project B also takes one week. If you do Project A first and then Project B, you will finish Project A after one week, and Project B after two weeks, with an average project completion time of one and a half weeks. Now suppose you work back and forth from Project A to B every couple of hours. Then, both projects will be finished after two weeks. Multitasking delays Project A for a whole week with no benefit to project B.

In case you think this is just theoretical, my fellow economists Decio Coviello, Andrea Ichino et Nicola Persico explored the impact of multitasking on the ability of judges to close cases in a reasonable time frame. They found that when judges were assigned additional cases to handle, all cases got delayed. This shows that, when you have more projects and you multitask, the time to completion for all of your projects suffers.
Multitasking impairs your ability to remember information.
When you switch from one task to the other, it is hard to keep in mind information about both tasks. For example, researchers asked students to do a small amount of web research while following a lecture. They found that students who did web research got lower scores on a questionnaire about the contents of the lecture.

What this means for you — and your hiring process

Multitasking not only delays project completion but also lowers the quality of the finished product. When a job candidate brags about multitasking, you should think twice about hiring them: Remember that multitasking is actually less productive. While it is not always possible to avoid multitasking, limiting task juggling will increase employees’ productivity and help them get things done faster. Have conversations with your candidates to find out what they actually mean when they say they’re a pro multitasker — and get the information you need to make more informed decisions about whether he or she has the focus to complete tasks well and in a timely manner.

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Are Happier Employees More Productive?

October 4th, 2016 Comments off
Are happier employees more productive?

Google is known for offering employees perks that will make them happier, such as great food and play rooms. This strategy is based on the belief that happier people are more productive. Is it worth investing in your employees’ happiness? And, as a recruiter, should you prefer happier candidates?

A recent study by Oswald, Proto and Sgroi published in the leading journal in labor economics in 2015 offers some answers based on a series of clever experiments:
1. Showing employees a comedy clip makes them 13 percent more productive.
In this experiment, the researchers showed employees a comedy clip. Not everyone found it funny, but on average there was a 13 percent increase in productivity. The increase in productivity was higher among those people whose mood was boosted the most by the clip.

2. Free food and drinks also boost productivity by 15 percent.
Researchers gave workers chocolate bars, fruit, and water, and 10 minutes to enjoy them prior to the work session. Getting food and drink made people 15 percent more productive compared to those who did not receive this benefit. This result confirms that Google’s strategy of offering good food may well be an effective way to increase productivity.
3. People who are unhappy in their personal lives are less productive at work.
Are unhappy people less productive? In this experiment, researchers compared the work performance of students from the same university. Students who had recently had a death or illness in the family reported lower levels of happiness and were 10 percent less productive than students who did not experience such sad events.

Should you therefore invest in free food and drinks for employees, or perhaps allow more internet browsing to lift people’s moods? This is probably going to make them more productive if they get working right after the benefit is given. What is unclear is whether the cost to the employer is worth the productivity boost. If you find low cost ways of boosting the mood of your employees, go for it: Everyone will benefit, employees and business alike.

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3 Ways to Attract (and Keep) the Best Candidates

August 25th, 2016 Comments off
How to Attract and Keep the Best Candidates

In June 2016, the unemployment rate fell below 5 percent (4.9 percent). This was the first time we experienced such a low unemployment rate since the beginning of the Great Recession. For recruiters, this means it has become harder to find talent to fill positions. So what can be done to improve yield and productivity? Research suggests some obvious solutions, and some less obvious ones.

Here are three solutions you can start implementing right away:

1. Start with a higher compensation.

My work based on data from CareerBuilder shows that job postings with higher compensation attract more (and better) applicants. A 10 percent increase in compensation is associated with a 7 percent increase in applicants. Furthermore, higher compensation attracts applicants with higher education and longer experience.

2. Offer them frequent pay raises.

You may want to also leave yourself some room to increase compensation in the future. Research suggests that workers who receive an increase in compensation perform better. However, the increase in performance is fairly short lived. It may be smart, then, to give relatively frequent smaller pay increases rather than one big pay raise.

3. Give them a gift: It’s the thought that matters!

Surprisingly, research has shown that giving employees a gift has a higher impact on performance than giving them the same amount in the form of a pay raise. In one experiment by Kube, Marechal and Puppe, a gift of a thermos bottle raised workers’ productivity by 25 percent over the course of one day! The key reason why the gift worked so well? It showed thoughtfulness on the part of the employer.

 

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How Do Puzzle Interview Questions Affect Your Candidate Experience?

June 8th, 2016 Comments off
How do Puzzle Interview Questions Affect Your Candidate Experience?

With the unemployment rate continuing to go down, it continues to get harder to recruit — making candidate experience more vital than ever in 2016.

Are your screening processes turning applicants off? Puzzle questions like “Why are manhole covers round?” have been popularized by Microsoft — and adopted broadly in many industries. The goal of such questions is to test how well candidates can think creatively in unusual and high-stakes situations. But research shows these puzzle questions have a negative impact on candidate experience.

Puzzle questions are perceived as unfair

In a Journal of Applied Social Psychology study, researchers compared puzzle questions with behavioral questions such as, “Talk about a time where you missed a deadline. How did you handle the situation?” People perceive behavioral questions to be fairer than puzzle questions. That is, people are more satisfied with the use of behavioral questions by potential employers, whether they end up getting hired or not.

Puzzle questions are perceived as irrelevant to the job

A big reason why people perceive puzzle questions as unfair is that they see them as less relevant to the job than behavioral questions. Puzzle questions were popularized by Microsoft, a technology company. Therefore, one may think these puzzle questions are more relevant and acceptable for tech job interviews. Yet, the study showed that whether the position was in tech or customer service, people perceived puzzle questions as less relevant for the job than behavioral questions.

Interestingly, Google has largely given up on puzzle questions because it found that these types of questions do not do a good job of predicting who the best performers on the job will be.

The lesson here? If you want to improve candidate experience and screening efficiency, steer away from puzzle questions.

 

Learn how to give candidates the kind of experience that will make them want to work for you with in-depth insights from CareerBuilder’s 2016 Candidate Behavior Study.

Robot-Proof Jobs and the Skills Gap of the Future

May 10th, 2016 Comments off
Robot-Proof Jobs and the Skills Gap of the Future

In March 2016, Google’s Alpha Go program beat one of the best Go players in the world, Lee Sedol. Google’s program performance is based on its ability to learn without being explicitly told what to do. Programs like Alpha Go will continue to become more and more common, and, at some point, will likely be able to replace workers in many jobs.

Right now, some of the positions most researched by employers include administrative assistant and business development manager. Will these positions still exist in 10 to 20 years, or will they be replaced by computers and robots? Researchers Carl Frey and Michael Osborne tackled this question in a 2013 working paper. To predict which occupations are most susceptible to computerization, they build on the assessment of technology experts. Overall, 47 percent of total U.S. employment is at risk of being erased by computers and robots in the next 10 to 20 years.

The largest occupation group at risk of computerization: office and administrative support jobs

Office and administrative support jobs are at risk of computerization because the occupation’s tasks are not very complex and can be fairly easily automated. In addition, some of the tasks previously done by office workers are already largely automated. In most cases, online calendars like Google Calendar (and other more complex meeting planning websites) make the need for a scheduling assistant obsolete. So, among the most researched jobs today, jobs like administrative assistant will likely disappear.

The largest occupation group protected from computerization risk: education, legal, community service, arts and media

Many of these jobs, such as that of a lawyer, require both creativity and social intelligence. While the work of the paralegal, for example, is likely to be soon automated through text search algorithms, the work of the lawyer is in no immediate danger. Indeed, lawyers must construct a creative legal case and deal with other people like the clients, the judge, and the other party’s lawyers. Among enterprise jobs, business development manager is an example of a job that is hot today and is likely to remain so: The business acumen and the people skill of the manager are unlikely to be replaced by computers.

The skills gap of the future: creative and social intelligence

In the current state of technology, computers do worst at tasks that require creative and social intelligence. In the future, then, it’s likely that workers without creative and social skills will be most at risk of losing out to computers and robots — while those jobs that require critical thinking and creative/social intelligence will continue to thrive.

 

How in-demand are candidates for the positions you’re hiring for? Get the latest labor supply and demand data withTalentstream Supply & Demand.

Not Able to Offer Money? Offer Candidates a Future Instead

April 19th, 2016 Comments off
If you cant offer more salary, offer a future

A recent CareerBuilder poll shows that 55 percent of full-time workers feel they have a job, not a career. What does this mean for recruiters? As the number of unemployed job seekers gets lower and lower, you’ll need a number of tools in your arsenal to attract new hires.

1.    Higher compensation.

As an economist, I have to start with a hard truth: Offering higher pay IS going to get you better candidates — and more of them. According to our study using CareerBuilder data, a 10 percent increase in compensation is associated with a 7 percent increase in the number of applications. Furthermore, higher compensation attracts more educated and more experienced candidates.

2.    Career progression.

Perhaps you cannot offer higher pay right now. Or, maybe you still cannot attract enough candidates, despite offering a good compensation package. Another strategy that works is to make it clear the position can lead to new opportunities in the future. In a controlled experiment, my fellow economists Ashraf, Bandiera and Lee found that emphasizing the career prospects of a job leads to the hiring of people who perform 30 percent better!

3.    Offering a future.

Why does offering a career path help in attracting candidates? First, as we just saw, the majority of workers (55 percent) don’t feel like they currently have a career. So, if you are able to offer one, you are ahead of the competition. Second, offering a career path can compensate for a lower salary today: If people can expect to be promoted and get a raise in the future, the starting pay matters less. Third, a career path attracts people who want to work hard in order to be promoted. Finally, the prospect of a future with the company attracts more loyal workers who invest significance in their work and produce better results.

 

Learn how to use data from Talentstream Supply & Demand to benchmark salary for your open positions and find better candidates this year

How to Stop Wasting Time in Your Hiring Process

March 11th, 2016 Comments off
3 Ways to Stop Wasting Time in Your Hiring Process

2016 will continue to be a candidate-driven market in which challenges abound for recruiters. So, more than ever, time is money. Recruiters will need to put in more effort to generate a hire, as candidates have many options. Again and again, recruiters will have to spend time looking at resumes and deciding who to interview and who to hire.

How should recruiters spend their time? Which unfilled positions should they spend more time on?  A team led by the economist Ernst Fehr published a new article that generates some key insights.

Here are three highlights from Fehr’s key insights:

Stop agonizing over which candidates to interview when you have many similarly good candidates.

Suppose you have one position, such as an administrative assistant job, for which there are many similarly good candidates. When there are many qualified candidates, they all start to look alike and it is hard to discern among them. So we strain to find ways to distinguish them and interview the right one. Therefore, these decisions tend to take an inordinate amount of time.

Is the time invested in these decisions justified? Generally, it is not. Indeed, if you cannot easily distinguish between qualified candidates, it is likely that whomever you hire will do a good job. The difference between Candidate A and Candidate B is so small it’s not worth agonizing over. Stop wasting time on these decisions, as they will contribute little to the bottom line.

Spend more time on positions where few candidates are qualified.

Now suppose you have a Java programmer position for which there are few if any qualified candidates. In this case, it is rapidly obvious which few candidates are qualified and recruiters can decide quickly. Yet, this is when the decision matters: If the first two candidates are much better than the third, you definitely would not want to interview the third one!

The research shows that most people tend to spend too much time deciding which candidate to interview when the differences between qualified candidates are slim than when the differences are large. This is not optimal, as recruiters should be spending relatively more time making decisions that are consequential for the bottom line. In other terms, recruiters should stop wasting time on positions where they have many similarly qualified candidates and spend relatively more time on positions where differences between candidates are large and hiring the right one makes a big difference.

Consider setting time limits and using analytics tools.

Finally, the research suggests a helpful method to improve decisions: Set a timer! For example, decide how long the interview decision should take and have an alarm sound. Even if you are not forced to make a decision when the alarm sounds, just being reminded that it’s time to make a choice is helpful. The researcher’s experiment has shown that, when people are spending too long on any given decision, they make better choices when they are reminded to hurry up.

 

How to Stop Wasting Time in Your Hiring Process

March 11th, 2016 Comments off
3 Ways to Stop Wasting Time in Your Hiring Process

2016 will continue to be a candidate-driven market in which challenges abound for recruiters. So, more than ever, time is money. Recruiters will need to put in more effort to generate a hire, as candidates have many options. Again and again, recruiters will have to spend time looking at resumes and deciding who to interview and who to hire.

How should recruiters spend their time? Which unfilled positions should they spend more time on?  A team led by the economist Ernst Fehr published a new article that generates some key insights.

Here are three highlights from Fehr’s key insights:

Stop agonizing over which candidates to interview when you have many similarly good candidates.

Suppose you have one position, such as an administrative assistant job, for which there are many similarly good candidates. When there are many qualified candidates, they all start to look alike and it is hard to discern among them. So we strain to find ways to distinguish them and interview the right one. Therefore, these decisions tend to take an inordinate amount of time.

Is the time invested in these decisions justified? Generally, it is not. Indeed, if you cannot easily distinguish between qualified candidates, it is likely that whomever you hire will do a good job. The difference between Candidate A and Candidate B is so small it’s not worth agonizing over. Stop wasting time on these decisions, as they will contribute little to the bottom line.

Spend more time on positions where few candidates are qualified.

Now suppose you have a Java programmer position for which there are few if any qualified candidates. In this case, it is rapidly obvious which few candidates are qualified and recruiters can decide quickly. Yet, this is when the decision matters: If the first two candidates are much better than the third, you definitely would not want to interview the third one!

The research shows that most people tend to spend too much time deciding which candidate to interview when the differences between qualified candidates are slim than when the differences are large. This is not optimal, as recruiters should be spending relatively more time making decisions that are consequential for the bottom line. In other terms, recruiters should stop wasting time on positions where they have many similarly qualified candidates and spend relatively more time on positions where differences between candidates are large and hiring the right one makes a big difference.

Consider setting time limits and using analytics tools.

Finally, the research suggests a helpful method to improve decisions: Set a timer! For example, decide how long the interview decision should take and have an alarm sound. Even if you are not forced to make a decision when the alarm sounds, just being reminded that it’s time to make a choice is helpful. The researcher’s experiment has shown that, when people are spending too long on any given decision, they make better choices when they are reminded to hurry up.

 

How to Hire Strong Team Players

February 10th, 2016 Comments off
How to hire team players

A recent Harvard Business Review article showed that avoiding hiring toxic workers improves company performance twice as much as hiring top performers. This is especially important if you are looking to hire for positions where team work is important. So, are you looking for candidates who will enhance team performance? What should you be looking for in a candidate’s resume? A 2015 Heinz and Schumacher research study gives some helpful clues.

Look for social service activities on their resume.

Researchers studied candidates’ willingness to contribute to the team effort rather than waiting for others to do the work. Candidates who listed on their resumes activities like working with the elderly or the disabled were significantly more likely to be team players. By contrast, candidates who participated in sports teams or students’ organizations were no more likely to be team players than the average candidate.

Put more weight on the more time-consuming social service activities.

The researchers next asked hiring managers to predict how much of a team player a candidate would be, based on the candidate’s resume. Managers correctly guessed that candidates with social service engagement would be more likely to be team players. However, managers were too optimistic about how much of a team player a candidate with low-intensity social engagement would be. The real team players were those who spent significant amounts of time participating in activities that helped the needy.

An example of this would be something like:

Full-time voluntary social year in the organization XY for disabled people, providing part-time support to a family with a disabled child for 2.5 years.

To sum up, if you are looking for strong team players, consider candidates who list a high-intensity involvement with needy populations on their resume.

Find the candidates you need quickly and easily with access to Recruitment Edge, which gives you access to over 90 million unique profiles with candidate info from across the Web. Learn more.

A Better Way to Tackle the Skills Gap

October 27th, 2015 Comments off
A better way to deal with the skills gap

The skills gap has been at the forefront of the HR debate, especially when dealing with some highly specialized positions. Skills formation starts with students choosing their field of study. To help close the skills gap, it would be useful for students to look at employers’ needs when choosing majors and certificates. But is that really what’s happening?

A number of research studies have investigated how students choose their majors. Here are their main findings:

  • Labor market prospects play a significant role in determining students’ major choice.
  • Students’ ranking of the labor market prospects of broad majors is broadly accurate. For example, this means students know that science majors tend to earn more than humanities majors.
  • Students tend to underestimate the labor market prospects of most majors.
  • More disadvantaged students underestimate the labor market prospects of degrees more often, and they make larger errors.

 

What does this suggest for HR recruiting strategies?

If you can afford to work for the long term, you should consider approaching students at local universities and colleges who may be interested in your field of recruitment. Perhaps you could organize information sessions. Because students often underestimate the monetary returns to particular majors, you can help them by informing them about typical entry-level salaries in your field. Furthermore, concentrating on more disadvantaged students may be especially helpful because they often have less access to information to start with. In order to choose which universities or colleges to target, data from EMSI College Analyst shows you the educational institutions that are the most likely to train for your field of interest.

Of course, informational campaigns with students can take some time to pan out, since students still need to take classes before they can graduate with a relevant degree. In the short run, if you have difficulties recruiting, you may consider increasing compensation. Indeed, my research based on CareerBuilder data shows that higher compensation attracts more and better applicants.

 

Locate your target talent with the click of a button with EMSI College Analyst. Find out more here.

Should We Sugarcoat Performance Reviews?

September 15th, 2015 Comments off
The subtle art of performance evaluations

Should we officially praise the top performers and tell the laggards that they should shape up? Telling the truth through differentiated performance evaluations should help motivate employees who are falling behind to put in their best efforts. On the other hand, being harsh on low-performing employees could further demotivate them.

So, what works best to improve employee performance? The naked truth or sugarcoating it?

A series of research articles reviewed in Kampkoetter and Sliwka gives us some guidance on the topic based on academic research.

Here are three lessons we can glean from their results:

1. In general, more differentiation in performance ratings increases employees’ performance.

The evidence shows that, typically, the vast majority of employees get the same performance rating. Yet, several studies have shown that teams with managers who deliver widely varied performance ratings experience higher overall employee performance. This suggests that, even though harsh ratings have the potential to reduce performance, the overall effect on the team’s performance is positive. HR managers should therefore consider introducing “grading on a curve,” especially in large enough teams. If teams are small, pooled evaluations where managers jointly rank their subordinates can help with grading on a curve.

2. differentiation in performance ratings can hurt performance through sabotage.

There are also cases, however, in which an increase in differentiation has decreased performance, and this is particularly true for lower-level occupations. One potential explanation for this negative effect is sabotage, i.e,. employees trying to improve their relative rank by betraying their co-workers. To test the relevance of this concern, researchers have performed an experiment in a lab. In the experiment, they made it possible for employees to hinder the performance of co-workers by paying a small cost to the employees’ own performance. The results of this experiment confirm that employees are more likely to engage in sabotage when performance evaluations are more differentiated. The lesson for HR managers is that differentiation in performance ratings should be limited when the opportunities for employees sabotaging each other are plentiful. Or that one should be particularly wary of sabotage when performance ratings are highly differentiated.

3. Differentiation in performance ratings works better when objective performance is easier to measure.

Another insight from the research is that differentiation is more conducive to performance if there are more objective performance measures managers can use. If there are limited objective elements to base the performance evaluation on, employees are more likely to feel managers are treating them unfairly by giving them low ratings. Therefore, whenever possible, making objective elements available for the manager to discuss will contribute to performance appraisals improving rather than sapping employee morale and performance.

Does Working from Home Actually Work?

August 18th, 2015 Comments off
Does Working From Home Actually Work?

Work-life balance is just an infinite dream unfulfilled.

But it doesn’t have to be that way. Thanks to the ever-increasing performance of new technology, telecommuting has become a reality, as more and more people work from home. So, yes, we CAN work from home, but SHOULD we?

The big question is whether working from home is in fact productive: As managers, we wouldn’t want working from home to turn into shirking from home. Unfortunately, until recently there wasn’t much hard evidence on the productivity impact of working from home.

New research about working from home

There comes amazing new research by Bloom, Liang, Roberts and Ying about the benefits of working from home. Why is this research amazing? One of the authors, James Liang, is the CEO of a top Chinese travel agency, and he wanted to find out if working from home actually, well, works. So, he teamed up with researchers and ran a randomized controlled trial — just the sort of trial that is necessary to authorize a new drug.

So what did the study find?

1. Working from home increased employee productivity by 13%.

For the study, call center employees were offered to work from home four days a week, and come to the office one day a week. Those who were allowed to work from home saw a 13 percent increase in productivity. This productivity boost was mostly due to a 9 percent increase in minutes worked per shift. This is because — perhaps surprisingly — employees had fewer distractions at home. In particular, they didn’t need to go far to get coffee or lunch.

2. Employees who work from home were 50% less likely to leave the company.

Employees who could work from home reported higher job satisfaction. In particular, they were happy to avoid the hassles of commuting. And they followed their heart: Those who could work from home were 50 percent less likely to leave the firm! A pretty remarkable achievement in an industry like call centers where turnover is high.

3. Working from home saved the company an amount equivalent to 40% of employees’ earnings.

Working from home not only made employees happy and productive, it also produced substantial cost reductions for the company. Most of the cost saving was achieved through a reduction in the cost of office space. So, don’t forget the less obvious benefits of telecommuting: Less office space is needed!

Let employees choose!

So should all employees who can do it work from home? As it turns out, working from home is not for everyone. Some employees in the experiment who first chose to work from home decided to come back to the office after trying it out. In the end, those who chose to work from home were those who tended to be more productive at home.

In other words, there is a lot of benefit in letting employees choose their own working arrangement. About 50 percent of the participating employees’ pay was based on performance, so employees had an incentive to make the right choice.

If telecommuting is possible and your employees are paid for performance, working from home seems like a miracle drug!

Does your company allow telecommuting? What has been your experience so far?

 

Like this? Read more about work-life balance and flexibility in the workplace here.

 

3 Tips for Setting Compensation and Retaining Employees

July 17th, 2015 Comments off
Determining compensation

How are raises decided in your company? Does the compensation structure reflect employees’ talent? If you are not rewarding talent, people may quit, and in the current economy, replacing them will be hard. More specifically, in the tricky case of a merger and acquisition, you want to restructure pay so that employees are kept happy and motivated, despite the many changes they are facing.

So, what pitfalls should an employer avoid when determining compensation for different employees? Recent research by my colleagues Arin Dube, Laura Giuliano and Jonathan Leonard sheds light on what to do – and not to do – when it comes to setting compensation.

1. A higher compensation increases employee retention

You may expect that a higher pay increases employee retention, and indeed, this is what the researchers found. So then, it would seem that increasing pay would help with retaining crucial employees. Yet, be mindful of how raises may affect the morale of other employees.

2. Beware of the unfair raise

If raises are not based on any objective criterion and seem arbitrary, employees who do not get a raise are much more likely to quit. A seemingly unjustified 5 percent raise to an employee will double the quit rate of a no-raise employee in the same position.

3. When it comes to employee retention, pay rates at your own company are most important

Will employees quit if you pay them less than the competition? It turns out that this is less important than paying them a fair wage compared to other employees in your company.

In a nutshell, to boost retention, it is important to make sure that your compensation structure is fair.

See how workforce analytics can help you determine compensation at your organization. LEARN MORE AND REQUEST A DEMO.

Attracting candidates: What is your reputation worth?

June 19th, 2015 Comments off
reputation conceptual meter

Nowadays, potential candidates have more and more opportunities to check employers’ reputations. Potential candidates can use their social networks to glean information about employers. They can also rely on rating websites that are specifically designed to inform people about the attractiveness of various workplaces. For employers, this raises the question of how important it is to maintain a good reputation, and a good online reputation, in particular. Research yields some key lessons about the value of a good reputation.

  1. A good reputation attracts more candidates

My colleague Aaron Sojourner and his co-authors Alan Benson and Akhmed Umyarov have created fake employer profiles online on Amazon Mechanical Turk. In their study, they randomly endowed some employers with good reputation, others with bad reputation and others with no reputation. Employers with good reputation attract roughly twice as many candidates as employers with bad reputation, and 50% more candidates as employers with no reputation. If you don’t yet have an online reputation, it’s time to get one, and ideally a good one!

  1. A good reputation does not always attract better candidates

Even though employers with a better reputation attract more candidates, they don’t necessarily attract better candidates. In the study I just mentioned, they found that people who worked for employers with a good reputation did not perform any better or worse than people who worked for bad reputation employers.

  1. A good reputation is worth its weight in gold

How much is your reputation worth? My own work with Ronald Wolthoff using CareerBuilder.com data shows that a 10 percent increase in compensation increases the number of applicants by 7 percent. This means that the number of candidates increases less than one for one with compensation. Taken literally, this implies that an employer with a bad reputation would need to pay more than twice as much as an employer with a good reputation to get the same number of candidates! In other words, a good reputation is worth its weight in gold.

 

 

How to Tap a Treasure Trove of Undervalued Talent

May 8th, 2015 Comments off
Talent

As the economy is picking up steam, there are nowadays only two unemployed workers per job opening. This means that the labor market is as tight as prior to the Great Recession. In this context, hiring new talent is getting harder and more expensive as you have to compete with other employers looking at the same people. Academic research by Lisa Kahn on the careers of college graduates reveals a surprising new tip to help you tap talent that other employers may neglect.

Students who graduate from college during a year with high unemployment have lower pay

The research compared the pay of new college graduates who graduated in years with high unemployment vs. years with lower unemployment, and found significantly lower pay for those who graduate during high unemployment times. For example, someone who graduated in 2009 when the unemployment rate was 10 percent would be making more than 20 percent less in their first year than someone who graduated in 2008 when the unemployment rate was 6 percent. There is no reason to believe that people who graduated in 2008 are any more talented than those who graduated in 2009: the 2008 graduates just lucked out by facing a better economic situation.

The impact of high unemployment on college graduates’ pay persists for at least 15 years

The impact of high unemployment on pay is not temporary but lasts for a long while: even 15 years after graduation, those who graduated during a high unemployment year tend to make less than those who graduated during a low unemployment year. Therefore, the bad luck of graduating in a bad year sticks with people for a long time.

Students who graduate from college during a year with high unemployment work in lower prestige occupations

Those who were unlucky to graduate during a high unemployment year not only make less but are less likely to be employed in high prestige occupations. For example, people who graduated in a bad year are less likely to be employed in managerial positions.

The lesson: hire people who graduated in years with high unemployment, and you will likely get a great deal

What does this all mean for employers? If you want to hire someone who is talented but has not been given a fair chance, take a closer look at applicants who graduated in the worst years of the recent recession, say 2009 to 2011. These people may seem less attractive to other employers because their resume shows less prestigious positions. However, if you consider that this happened because of bad luck and not a lack of talent, you will be able to hire a very competent but undervalued candidate. Furthermore, because people who graduated in a bad year tend to make lower salaries, such a hire will also cost you less. So, if you want to hire great talent for less, tap the treasure trove of those who graduated in 2009-2011.

Do pay comparisons hinder your capacity to hire talent?

April 15th, 2015 Comments off
Offer of employment

Will a candidate accept your job offer? Compensation is obviously an important element that makes your job offer attractive. What is perhaps less obvious is that candidates tend to compare the compensation you offer to other reference points. In particular, they may compare it to other people’s compensation or to their own compensation in similar jobs.

Newly published experimental research (Bracha, Gneezy, and Loewenstein, 2015, http://www.jstor.org/stable/full/10.1086/678494) shows that such pay comparisons affect workers’ propensity to take on a job, and offers insights about how to increase your chances of getting the talent you want.

Candidates are less likely to take on a job when compensation compares unfavorably to compensation they received in another job

One of the clearest reference points in most candidates’ minds will be their own recent compensation. If the candidate was previously working in a job where they had higher compensation than what you are offering, this could make them hesitant to take your job. This is the case even if the compensation level you offer is reasonable by industry standards. But people have a psychological tendency to use reference points, and most people really dislike the idea of earning less than what they were making before.

Candidates are less likely to take on a job when compensation compares unfavorably to compensation received by other people

Another point of reference that is likely to influence a candidate’s decision is how If candidates are aware that others were offered a higher compensation for a similar position, this will lower their willingness to take on your job offer. This is particularly true for men, and to a much lesser extent for women.

Offering a good rationale for lower compensation improves your chances of hiring

So, if a candidate complains that your compensation is too low, what can you do? There’s the obvious answer of offering a higher salary, but in many cases that’s simply not an option. Luckily, the research suggests that providing some justification for why you are offering a lower compensation can wipe away much of a candidate’s negative impression.

While you may not always be able to match every candidate’s salary expectations, if you come prepared with a solid rationale for the compensation you are offering, you’ve always got a shot at securing the best talent.

How Can You Attract More Female Candidates and Boost Company Performance?

March 17th, 2015 Comments off
Magnet

Research suggests that companies with a diverse workforce perform better than companies with less diversity. In particular, companies with a higher representation of women on their boards see a higher return on equity, sales and invested capital than companies with a lower representation.

But is there a recipe for recruiters to attract more female candidates? A recently published research paper in one of the top economics journals suggests there is!

To attract more female candidates:

  • Avoid using male connotations, such as sports metaphors, pictures that only present male workers, etc. in your job ads.
  • Limit the share of compensation that depends on performance rank. For example, this kind of compensation regime would give a low baseline compensation topped up by a large bonus for the employee who gets the top sales performance. It turns out that both female and male applicants are deterred by this type of competitive compensation, and so you would get fewer applicants overall. However, women are even more deterred by such compensation regimes than men are. Therefore, this competitive compensation scheme results in a smaller and more male-dominated pool of applicants.
  • If you must use performance pay tied to rank, be even more careful to avoid any male connotations in the job ad, as these two together have a very strong deterring effect on women.

 

You may think that compensation that depends on performance rank will attract more qualified female candidates. The study shows that this is not the case. In fact, competitive pay does not increase the experience or education level of female candidates. Therefore, by limiting the share of compensation that depends on performance rank, you attract more and no less qualified female candidates.

By avoiding male connotations and limiting the share of compensation that depends on performance rank, you can attract more female candidates, which means that you have a larger pool of applicants to choose from. This increases your chances of finding a great female candidate and can help you boost your company’s performance through greater diversity.

 

Job Growth is Strong: Will you Have to Pay More?

February 19th, 2015 Comments off
Wage growth

According to the January jobs report, U.S. employers added 257,000 jobs, beating expectations. The report has also shown some increase in wages. The bad news within this good news is you may have to increase compensation.

In a recession, the increase in unemployment puts downward pressure on wages. In fact, a high level of unemployment can indicate that wages are too rigid and have not come down enough. It’s supply and demand: In a recession, demand for workers is low, so wages need to decrease to allow more workers to find and keep a job. Right now, we are (finally) out of a recession, so one can expect wages to come back up as job creation increases and unemployment decreases: But how quickly do these adjustments happen? What do we know about wages’ response to the business cycle?

If we look at all employed workers, we see that, in the U.S., a 1 percentage point decrease in unemployment is associated with a 1.2 percent increase in real wages (i.e. after accounting for inflation). So if the unemployment rate were to decline from its current 5.7 percent level to 4.7 percent by the end of the year, real wages would likely increase by about 1.2 percent. This number gives us an idea of how much the compensation of the average worker is likely to increase if the economic outlook continues to improve.

The impact on new hires

Recruiters, beware: For new hires, the impact of economic conditions is even stronger. If the unemployment rate were to decline from its current 5.7 percent level to 4.7 percent by the end of the year, real wages of new hires would likely increase by about 1.8 percent (Martins, Solon, Thomas, 2012). CareerBuilder’s Supply & Demand portal can help you stay ahead of the compensation trends and decide on a competitive compensation package for your vacancy. In a nutshell, recruiters should budget for increases in the compensation to stay competitive in the race for talent as the state of the economy improves.

Have you had to increase compensation for new hires? Tell us in the comments section.

 

 

Top 5 Schools to Recruit Software Engineers Now

January 14th, 2015 Comments off
Top 5 schools to recruit software engineers

Hiring trends point to tough competition in 2015. Topping the list of highest-growth industries is information technology, with 54 percent of employers planning to increase staff in 2015. Within IT, software engineering is one of the hardest-to-fill positions. EMSI Analyst shows that, on average, there were almost twice as many job openings as hires between 2011 and 2014. This means that, in a given month, employers can only fill about half of their software engineering vacancies!

Because of this talent shortage, employers often go directly to campuses in order to recruit. This is where, again, EMSI Analyst comes in handy. Indeed, the tool allows you to see the top schools in terms of software engineering graduates. While a well-known computer science school, CMU, comes in at the 5th rank, San Jose State University graduates the highest number of software engineers.

Here are the top 5 schools to recruit software engineers right now:

Software Engineers Chart

Another option for employers to address the shortage of software engineers is to find talent in-house: with additional training, some employees in closely related job titles may be able to do the job. And indeed, as I previously wrote about promoting within, there are many advantages to promoting from within, such as saving on compensation and having employees who are a better cultural fit.

Good luck with recruiting software engineers in 2015!