Over the last few months, startups and big tech companies have shifted from fast-growth hiring to layoffs and efficiency. We’ve seen over 100,000 layoffs in January alone, with no end in sight. A recent Techcrunch article stated that cost-cutting is taking precedence over growth investments, and companies are still spending on tech, but they are looking at their expenditures much more closely.
What does this mean for tech hiring? Various recruiters in my network have told me that their companies are shifting from fast to sustainable growth. Companies are aiming for – or protecting profitability, lowering costs and employee productivity.
How can recruiters shift from fast growth to sustainable growth? Here are five tips to get you started.
Reduce recruitment spend
Reduce the number of agencies and sourcing platforms you’re using. Reduce the amount of paid ads on your LinkedIn or any other job sites. Consider a cheaper ATS system. That embedded talent partner? That person is probably costing you around £10k-£13k a month even though their impact is, at best, equal to that of an internal recruiter but more than twice as expensive. Here’s a made-up example of yearly cost savings for small to midsized companies using tech sourcing platforms, agency fees and an embedded recruiter:
- LinkedIn: £13,370 for two licenses. ✅
- Greenhouse: £8000 ✅
- Hired.com: £18,000 ❌
- Otta.com: £14,000 ❌
- Cord.co: £11,800 ❌
- Agency fees estimate: £120,000 (±5-6 placements) ❌
- Embedded recruiter: £80,000 (6 month contract, £13.3k a month) ❌
Deprioritise quantity of candidates
Hiring teams are obsessed with volume-related metrics, such as the number of candidates considered for each vacancy and the number of interviews per hire. However, a high-volume approach to hiring can be counterproductive.
For one, attempting to review a large volume of candidates can lead to “analysis paralysis,” where hiring managers become overwhelmed by the sheer number of options and struggle to decide. Additionally, viewing hiring as a numbers game can lead to a false sense of progress, where managers believe they are getting closer to finding the perfect candidate simply because they have reviewed a certain number of resumes.
Not only does a high volume of candidates lead to more time spent interviewing, but it can also result in more money spent on agencies. This approach can significantly drain resources better spent elsewhere, leading to higher expectations and disappointment.
In light of these factors, it is important to consider other metrics besides volume when evaluating the success of a hiring process. Rather than focusing on sheer numbers, prioritising quality over quantity may be more effective.
Focus on quality of candidates
The most important step to finding great candidates is carefully defining what “great” looks like. You can define the traits of a good candidate by implementing a Structured Interview Process with every new role. This process should include the following:
- The job intake: describe the role, business need for the vacancy, day-to-day responsibilities, essential skills and values needed to perform the function and three / twelve-month objectives.
- Creating the interview process and scorecards: with your hiring manager, list questions you will ask during the interviews.
- Interviewer training: discuss the intake and scorecards with your interview panel and provide best-practice guidelines, i.e. follow the scorecard, ask questions in the same order, and fill in scorecards during and immediately after the interview.
Structured interviews are scientifically proven to be effective in helping you hire the best candidates. Also, this method will give you a great idea of what skills, values and traits to look for in candidates during the sourcing and phone screen stage, making you a much more effective recruiter.
Start with business needs
Take the job intake process one step further by understanding the business problem a new hire can solve. By being clear on how an engagement can contribute to business growth, you can ensure you’re hiring for valid reasons and help define the day-to-day responsibilities that drive growth. You can use the job intake to solve business problems by starting the intake with two questions:
- What is the business problem your hiring manager is trying to solve? For example, think about the (yearly) goals your company want to achieve; Is your company trying to improve poor customer satisfaction, reduce operational inefficiencies, or increase profitability?
- How does your new hire help solve this problem? You should position the role mission, day-to-day responsibilities and three-twelve-month results towards helping meet company objectives. You can also use the answer to this question to guide the development of your interview process and scorecards.
Track quality of hire
Quality of Hire refers to measuring a hire’s long-term impact on the company. A robust Quality of Hire leads to reduced turnover, improved performance and a more positive office culture.
Once you make a hire, partner up with your broader People team and track Quality of Hire by focusing on the following components:
- Hiring manager satisfaction at three and twelve months.
- Team fit through peer reviews.
- Employee performance at three and twelve months.
Compare these metrics to your hiring process, and develop improvements. What strengths did we uncover with our interviews? What weaknesses could we have noticed in the candidate? What competencies do we look for next time, and what questions do we ask the candidate to uncover these competencies?
Sourcing platforms and volume are great for companies with vast resources and time to spare. For many other companies in 2023, taking a qualitative approach to hiring can lead to lower costs and better employee performance. So, make your recruitment process more sustainable by considering what sourcing platforms you can eliminate, focusing on solving your company’s business needs and tracking the quality of the people you hire.