Time for People Leaders to prove themselves. Again.
Boom is now bust. Bull is now bear. Bubble is now burst.
Whichever clichė you choose, the fact remains: these are different economic times. And that means new realities for HR leaders. As inflation bites globally, talent budgets face renewed pressure. In fact, a recent Personio study shows that 55% of HR professionals have already seen cuts this year, or expect them imminently.
But most businesses are still hiring – meaning talent teams will need to do more, with less. As People functions once again look to show their worth under pressure, efficiency will be vital.
Which brings us to the two metrics that’ll matter more than ever: time, and money. How can you, as an HR professional, keep hiring well, without wasting a second? There might be one way you hadn’t considered:
Hiring for potential
Putting potential first can speed your hiring process, and cut your costs. But does ‘hiring for potential’ actually mean?
Hiring for potential prioritises candidates’ skills and intelligence, aiming to understand what they can do – not what they have done. It’s an antidote to the common, costly approach of experience-based hiring (where the CV still reigns supreme).
As budgets shrink and costs rise, here are three ways hiring for potential can save your team time and money:
Beat skyrocketing salaries
Forget skills ‘gap’ – today, we’re in an experience trap and this is the biggest skills mismatch since the Industrial Revolution. And, according to 71% of CEOs in a recent Deloitte survey, it’s set to continue.
This is sending salaries skyrocketing.
There are currently 1.2m unfilled job openings in the UK, with digital skills especially in-demand. A UK government study found that a whopping 82% of new job listings include digital skills as a key requirement. And the same study shows that these jobs pay almost 30% more than those without digital skills requirements.
This supply/demand mismatch is causing a costly, three-part doom-loop for talent teams:
- Spend weeks or months searching the same small pool of experienced, skilled candidates.
- Find that perfect candidate (eventually), and stomach the high salary they command.
- Watch that same candidate depart within 18 months, as salaries elsewhere continue to rocket. Repeat.
While this might have been bearable when belts were a little looser, different economic times call for new measures. By hiring for potential, rather than just hard skills and a solid CV, you put an end to that loop, and save £1,000s in search and salary costs. Here’s how.
How hiring for potential ends the salary spiral
The current, soaring-salary approach is unsustainable. Hiring for potential is the cost-effective alternative, and a quick example illustrates this.
Say you’re hiring a developer. You can either find a senior dev with years of relevant experience (and a salary to match). Or you can hire a younger dev with the drive, intelligence, and grit needed to grow with you.
Option B won’t just save on salary costs (this much is obvious). It’ll also:
- Shorten your search, as the talent pool will be larger and more diverse.
- Improve your chances of retaining that candidate, if you’ve given them an opportunity to learn and grow.
While the benefits are clear, this begs the question: how do you identify that hunger, intelligence, and grit? This brings us onto another reason to hire for potential – smarter, swifter sifting.
Sift swiftly – with the right toolkit
Early-stage sifting is arguably the most inefficient part of the hiring process. And, as we’ve already established, inefficiency is a luxury you can no longer afford. And at the heart of it all? CVs.
True, most recruiters can screen a CV in seconds. But when you scale this up to hundreds of applicants per role, and multiple roles per recruiter, it’s easy to see how this stage becomes a costly quagmire.
In the hunt for efficiency, it’s time to reconsider manual CV review. Let’s forget for a minute that CVs don’t actually offer any predictive, meaningful data (more on that shortly) – they’re just a slow, ponderous way to find great people.
Hiring for potential, on the other hand…
Seeing potential with an integrated assessment
As any mechanic might tell you, it helps to have the right tools for the job. And it’s no different for your hiring process.
An integrated, behaviour-based assessment (like ours at Arctic Shores) can help you find high-potential candidates in a matter of minutes (saving your team thousands of hours in CV sifting). Here’s a quick example.
How to save 100 days in sifting time
Last year, WSP had a common early-stage setup for their high-volume hiring – video interview + CV screening. But this was time-consuming for recruiters.
By replacing this manual process with Arctic Shores’ behaviour-based assessment, though, they automated their screening stage – progressing high-potential candidates quickly and easily based on their potential. This saved them 2,500 hours in manual screening time – or 100 days.
What’s more, you can integrate this type of tool into your ATS – so you needn’t waste time learning a new system. With the right tech in place, you can enjoy swift sifting almost immediately. Because slow is so last year.
“But speed doesn’t necessarily equate to quality”, you’ll rightly say. The good news is that hiring for potential, with the right assessment, ticks that box too.
Here’s how you can improve candidate quality, cut down search time, and ultimately save you money:
Hire right, hire once
One of the most costly things you can do with your people is replace them. Estimates vary, but it could cost up to nine months of that employee’s salary.
And this mentions nothing of the time wasted, of course. As HR budgets contract, every hire has to hit the mark. But how can you guarantee that, when most processes start with a CV, and CVs don’t actually measure anything?
It’s now well-established that experience doesn’t predict success. New times call for new measures. And that brings us back – you guessed it – to potential.
Potential: the route to accurate hiring
With experience of little use, hiring for potential is the most accurate way to hire. This calls for a clear picture of the human skills (think creativity, or resilience) that correlate to success. But to truly measure those skills (and hire accurately), it’ll take a new toolkit – led by in-depth job analysis and a powerful assessment.
Before you measure what matters, you need to know what matters. This is where job analysis comes in.
With a helping hand from experienced Business Psychologists (like our team at Arctic Shores), you can identify the key success criteria for your role. Combining workshops, high-performer interviews, and desk research, they’ll help you paint a picture of what good truly looks like in your roles.
This way, you can create a repeatable framework that’ll help keep your hiring both accurate and fair.
Once you’ve built that framework of success criteria, it’s time to assess against it. It stands to reason, then, that true potential-based hiring takes a powerful assessment.
Ideally, you want a tool that measures both behaviour and workplace intelligence in one place. This will give you new insight into what your candidates tend to do (their natural preferences), and what they can do (their maximum performance). This paints a rich picture of your candidates’ potential, leading to more accurate hiring.
It’s worth noting that, while intelligence is a useful predictor of job success, it’s not vital for every role (especially those with high levels of repetition), and can disadvantage some protected groups. Again, a Business Psychologist can help you keep your process accurate and fair.
Hire for potential with Arctic Shores
Moving away from experience – and the CV – can feel scary. But, with budgets plummeting, now is the time to act. We’ve seen how hiring for potential can lead to expanded talent pools, shorter searches, smarter sifting, and accurate hiring.
You know the ‘why’. Now for the ‘how’.
Our Playbook for CV-less hiring sets out the six key steps you’ll need to take to escape the experience trap, measure potential, and hire sustainably in this new economy. Download your copy today.