With Paul McDonald, Sr. Executive Director of Professional Staffing Services at Robert Half
Steve continues his conversation with Paul McDonald, Senior Executive Director of Professional Staffing Services at Robert Half, whom Steve invited back to explore the other side of the employee hiring transaction—how an employer can find his or her dream employees.
With unemployment at an 18-year low in the U.S., employers are having a tough time finding qualified candidates and are doing everything they can to attract talent—from employee referral programs to hiring Robert Half to help them find people and to move people around internally. For now, employers are content hiring someone who meets about 70% of the job description and training new hires for the remaining 30%.
While online employment websites, such as monster.com, are one piece of the employee-hiring puzzle, Paul coaches employers to go the whole nine yards in this job climate and to become realistic about their requirements and accuracy of job descriptions.
Cost of Bad Hires
Getting the right employee on board is vital because hiring mistakes can be expensive. For one, there’s the investment in bringing employees on board and training them. Secondly, a disruptive hire could impact the morale of fellow employees, creating an additional cost of bringing back employee morale. As a result, companies are investing more time on onboarding new hires, allowing new employees to hit the ground running.
In addition, hiring managers often don’t like to admit their mistakes, so they end up holding on to bad hires for longer, which also adds to costs. To prevent all this, Robert Half urges employers to act quickly to rectify employee hiring mistakes.
Employee hiring requirements also depend on the size of the company, whether small, medium, or large. Paul notes that the complexity of an organization changes as it goes up in size. While big companies have internal Human Resources departments, smaller companies lean more on outside resources for their hiring needs, to select and sift through the right candidates and serve them up either on a direct, temporary, or contract basis.
Paul notes that hiring must comply with ever-changing state and local regulations, such as minimum wages or not being able to ask for salary history.
Although technology has improved the hiring process and helps identify people quickly and swiftly, Paul believes it cannot replace human judgment either through in-person interviews or video-calling.
The Intuitive Component
While a lot of hiring metrics are quantifiable—such as the correct skill set or experience—intuition plays a major role in finding good hires. A good hiring manager should be able to evaluate soft skills, determine if a person would fit into the culture of the organization and whether they’re capable of growing within the company over the long-term.
Questions To Ask Recruiters
Steve asks Paul about the sorts of questions employers should be asking the recruitment companies they hire. Paul says he’d, first and foremost, advise employers to get line managers and the company’s HR personnel to internally connect prior to hiring a recruitment firm such as Robert Half, button down the job description and the ideal set of soft skills, and then meet the recruiter. Employers should also use recruiters’ job market knowledge for guidance on competitive salaries and benefits, especially in a hot jobs market where employee hiring metrics change from one quarter to the next.
If you’re an employer looking to hire, keep Paul McDonald’s recruitment tips in mind and make sure you check Robert Half’s free online 2018 salary guide so you can offer compensation and benefits that make your job stand out from the competition!
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: In light of a recent segment we just posted about how to find your dream job, I’ve invited back Paul McDonald, senior executive director of professional staffing services at Robert Half. And I asked him back to explore the other side of the hiring transaction, the point of view from the employer. In other words, we want to know how an employer can find his or her dream employee. So let’s see where this takes us. Paul McDonald, welcome back to the show.
Paul McDonald: Thank you for having me, Steve.
Steve Pomeranz: So what are some of the challenges that employers experience when seeking to hire?
Paul McDonald: Well, at this point in the hiring process with unemployment where it is, a 17 or 18-year low, we’re finding that in the United States, employers are having a tough time finding the right candidates even to interview. There is a number of sources that they’re going to that we can chat about. But in the areas in which we serve—accounting, finance, technology, creative, legal, and skilled administrative staff—we’re hearing from our clients that they’re pulling out all the stops, all the strategies that they’ve ever heard of, or thought of. From employee referral programs to hiring us to help them find the people, to moving people around internally and hiring maybe 70% of the job description and training up on the rest.
Steve Pomeranz: I gotcha.
Paul McDonald: Boy, there’s so many different strategies that they’re executing on right now because of the unemployment at such a historical low.
Steve Pomeranz: How do these sites like monster.com, these employment listing sites, how do they fit into the picture and how effective do you think they are?
Paul McDonald: Well, it’s one piece of the puzzle. The puzzle is, it’s like we coach all of our clients to do it all. So, number one, post your job on your own website which then can move out to one of those aforementioned job boards. That’s great, make sure it’s snappy, make sure it’s interesting, that job description. Make sure it’s realistic. What we’re finding, many of our clients as they come to us for coaching and advice, they are asking for this person that doesn’t exist. For instance, we had recently a company looking for a coder, somebody in the technology arena.
They were asking for three years of experience in a certain software language. Well, that software language was only a year old.
Steve Pomeranz: [LAUGH]
Paul McDonald: So, we work with them to make sure it’s a realistic, accurate job description with must-haves, and then nice-to-haves bifurcated and out.
Steve Pomeranz: What is the cost to an employer of making a bad decision? You guys have done numerous studies on this.
Paul McDonald: My goodness, the cost of a bad hire is a multitude of factors. One, the thing about the person, you invest in training. So there’s an investment cost that you do in training in bringing that person on board.
Number two, the morale impact, this is what most employers don’t think about. The morale impact on your department and fellow employees…say it’s a disruptive hire…that can take people off their game and not only have a vacant seat for the person you just replaced or have to replace, but then also all the others, morale and the time you have to invest in bringing those people back to high morale.
Steve Pomeranz: Yeah, there is that point. I also think back my own experience here with our company, you hire someone and you invest a lot of time training. You really want to do your best to make them a great employee. And then they just move on or you just seem to have thrown all that time and those resources out the window.
Paul McDonald: Yeah, there’s no question. And we’re finding companies are investing more time on the onboarding of individuals today. And that onboarding can be 10 weeks long, 13 weeks, 6 months long, depends on what level of skills that you’re hiring in for.
Steve Pomeranz: So once I have a hire, and let’s say, I find out after a period of time it’s not really working out.
I mean, it’s not terrible, but it’s not working out, do employer have a tendency to hold on to people too long?
Paul McDonald: They don’t like to admit their mistakes.
Steve Pomeranz: Yeah, they don’t want to hurt anybody’s feelings either probably.
Paul McDonald: Well, it’s a reflection on them as a manager for making the poor hire.
Steve Pomeranz: Good point.
Paul McDonald: But what happens is that they’re finding four to six weeks in, they recognize that they made a mistake. But then that’s taking them two, three, and four months to correct the mistake. And that’s the piece where we’re urging employers that if you’ve identified that you’ve made a mistake, act quickly and swiftly because the downside is like I mentioned before, the morale on the others in the department.
Steve Pomeranz: That’s a great point. So generally speaking, well, you’ve got different-sized companies to think about. You’ve got the very small, you’ve got the medium-size, and you’ve got the large. Is hiring different based upon the size of the company and the number of employees?
Paul McDonald: Well, the complexity of the organization changes as it goes up in size. So, you typically have a larger HR department, human resources department, to help you out in the larger companies, in the mid-size companies. So, as you go down to the smaller companies and some mid-size, they lean more on outside resources such as us at Robert Half, to help them.
We act as their recruitment arm, and we’ve been doing this for 70 years now of helping organizations identify professional talent. And they lean on us to be their eyes and ears, to select and sift through the right candidates and serve them up either on a direct-hire basis or on a temporary or contract basis, the proper employee.
Steve Pomeranz: Yeah, I want to get to that in a minute about what it means to hire or recruit and what kind of questions to ask? With regards to these smaller and mid-sized corporations, you actually operate out of California. And I bring that up because California is kind of known for a lot of regulations and red tape and things you can say and can’t say, and can do and can’t do, and it’s a litany of regulations and so on. How much in your view being in the business is that impacting on the ability for companies to hire and to do business?
Paul McDonald: And again, you’re right. We’re headquartered in California, but we have worldwide operations and we operate in the states. I would say that we’ve adapted. The environment is one where there’s ever-changing regulations. Some states are enacting or have enacted, you can’t talk about past salaries, or pay history. But you can tell from a skill set if the person’s a good fit. You can tell when you interview them face-to-face or through Skype or FaceTime, if they’re a cultural fit for the client. So, while the computer has helped us generate—and this is back to one of your previous questions—the computer helps and the technology helps identify people quickly and swiftly.
You still need to have the personal touch in terms of sifting through the candidates. What you can and can’t ask, that’s going to be ever-changing, but you deal with it. It’s still a face-to-face interview; it’s still a cultural fit. It’s still a technology or a big part of technical fit that the clients are looking for. And it just, it’s one of those things that, yeah, there might be a change here, but you adapt to it.
Steve Pomeranz: That brings up another point to me. So, a lot of it is quantifiable—do they have the correct skill set, the experience? How much of it at this point is intuitive?
Paul McDonald: Well, I would say intuitive, let’s say, you need to have skilled individuals in your HR department, in your recruitment, a cadre of recruiters, for instance, us. Those people need to know what it is you’re looking for from a hard-skill standpoint, technology, and technical skills, specifically. But then they need to know the culture of the organization because that’s where the soft skills come in. That’s where you’re interviewing for fit. And so, this is what we’re finding from a strategy standpoint. Some of our savvy clients are doing this, and we’ve been helping them do this. Job descriptions are 100% of what the person should or could be doing. We’re finding that many of the clients today are taking advice and saying, “okay, I’m finding somebody with 70 or 75% of what I need on the technical side,” but they’re hiring on the culture and soft skill side, to see if they’re a fit and if they’re going to grow within their company for the long term, and then they’ll train up on the rest.
Steve Pomeranz: Yeah, that’s very good for an employee that’s going out looking for work to realize as well.
Paul McDonald: Yes.
Steve Pomeranz: I guess I don’t want to speak for you, but it seems to me you can kind of admit or see that you may have 75 or 80% of the skills that are required, but you have the right attitude and the willingness to grow and work. And I think at this point that’s because of the tight job market, that’s probably a good thing. Before we run out of time, I want to ask you. So, let’s say that I decide I need a third party to come in and help me hire. What kind of questions would I ask a potential recruiter that I wanted to hire? I don’t know anything about your business. If you were on my side, and I was trying to hire you, what would I want to know?
Paul McDonald: Yeah, I think that this is very important because this is usually where things fall down. First and foremost, I would advise employers…there’s line managers, for instance, finance accounting line managers that are trying to hire this individual and then be day-to-day managers over them. And then there’s human resource individuals. The success formula is for those two parties internally to connect prior to coming to us and describe what’s needed, what’s going to be a really good person for us to hire, realistically hire.
Then meet with us together, meet with an outside source like Robert Half, either from the line management or HR or both preferably and describe and come up with a project plan, if you will. These are metrics that we’re trying to review. This is what we think we need. What do you think? You’re in touch with the market on a regular basis. Are we realistic? What do we need to pay? What’s the competition doing here in our surrounding area? And again, I’ll go back to be repeated, but am I being realistic? Because that’s typically where things fall down.
Maybe they haven’t hired in three or four years. The market is changing on a quarterly basis for many of the people. Unemployment rates might be at 4.1% on a national basis. For many of the skill sets that we see, it’s at 2% or less than 2%.
Steve Pomeranz: I’ve got to stop you there, Paul.
Unfortunately, we are out of time, I guess. Paul McDonald, senior executive director of professional staffing services at Robert Half. And by the way, they have a salary guide that’s available online. You can get to it at roberthalf.com/salary-guide. And I think that’s pretty cool. And if you want to hear more about this segment, about all the segments we do, don’t forget to go to our website which is stevepomeranz.com.
Thanks so much, Paul. I appreciate you being with us.
Paul McDonald: Thank you, Steve.