The rise of predictive hiring has marked a shift in the way businesses conduct recruitment. Data has become pivotal in the search for the next candidate. Leveraged correctly, family businesses can use data to meet the growing complexity of the recruitment industry, attracting elite external talent to carry their organisations forward.

Dr John Sullivan is an internationally recognised leader in HR and the author of countless articles and books on all areas of talent management. His experience with modern recruitment practices, notably predictive hiring, has made him one of the industry’s most respected strategists.

Innovation, Sullivan asserts, is the single most important attribute in the digital age, and building innovation into an organisation with innovative employees is a logical solution for businesses. Finding those highly sought-after employees, however, requires an adaptable, data-driven approach.

Tharawat Magazine sat down with Dr John Sullivan to talk about this revolution in recruitment, the importance of assessing aptitudes in real-time and the impact of the freelance economy on HR.

The Revolution in Recruitment: The Rise of Predictive Hiring
Image courtesy of John Sullivan.

“Progressive companies are sourcing the best global talent and allowing employees to work remotely. […] Their recruiting practices give them a competitive advantage.”

How has hiring changed?

Recruitment has changed drastically in the last 10-15 years, driven by companies that have used technology to recruit more effectively.

Progressive companies are sourcing the best global talent and allowing employees to work remotely. They are augmenting their human resources with artificial intelligence to streamline workflow and protecting these processes with state-of-the-art cybersecurity. Their recruiting practices give them a competitive advantage.

Others are failing to adapt because they don’t have access to the technology or have chosen not to implement it. They are passing over elite candidates and losing their top talent.

Start-ups and other tech-savvy companies have pinpointed recruitment technology as a key innovation for acquiring the best people.

For the most part, this involves machine thinking – programs that use complex algorithms for recruitment by parsing applications in mere seconds to determine a candidate’s suitability for a position. Taken a step further, this technology can also scour databases for highly qualified individuals during talent searches.

Nowhere are these practices more apparent than in tech giants like Microsoft and Google. They are serial innovators, which is one of their markers for success. This ability to continuously reinvent cannot be overestimated.

Family businesses are sometimes innovators, but it’s not necessarily their defining quality. More commonly, we associate loyalty, consistency and customer service with them. Family businesses stand to benefit hugely from living all four simultaneously, and hiring innovators is critical.

A recent study conducted by Google assessed what made people succeed in their roles. The data showed that rapid, self-directed learners perform best; these are the defining features of innovators.

The Revolution in Recruitment: The Rise of Predictive Hiring
Image from Shutterstock.

How can family businesses adapt?

Family businesses already have a distinct advantage over large corporations in attracting talent. For one, there is often a clearer path for advancement – a certain fluidity exists. There is often far less bureaucracy to navigate. New hires might even interact with the CEO regularly. Compared with Facebook, a company of nearly 40,000 where mobility is limited, employees stand to make a greater impact at family businesses.

That said, family businesses face a unique challenge in staffing. It is common practice to hire immediate or extended family members, but doing so exclusively usually means that some of the company’s needs aren’t being met. Maybe no one in the family is an expert in IT, for example. So, family businesses need to hire diversely skilled employees or outsource. Therefore, staying abreast of the latest hiring practices is crucial to their longevity.

Goal and value alignment are another consideration. Perhaps environmental sustainability is a priority at a given business. The promotion of social responsibility may decrease their bottom line and limit the candidates available for budgetary reasons. That distinction must be built into the talent search. A good candidate will take a lower wage in the name of social responsibility.

“Google used to look for technological skills but found that those skills became obsolete in just six months…It’s the self-directed learning, not the skill set that makes the difference.”

What should family businesses know about predictive hiring?

Predictive hiring is a complicated endeavour. There are innate qualities that employees possess which are not easily detected by programs, and as a result, relying too heavily on the technology is a failure in judgment. Data that looked at initial predictive hiring technologies indicated that approximately half of all hires failed within 18 months, which is a poor investment for both employers and employees.

The Google research I mentioned earlier applies here as well. Google used to look for technological skills but found that those skills became obsolete in just six months. So, it’s the self-directed learning, not the skill set that makes the difference.

As it turns out, educational markers like school attended and grades received matter little when it comes to predicting success. Progressive companies look for a candidate’s demonstrated knowledge and adaptability.

For recruitment, the Internet is both a boon and a curse. Recruiters have greater access to a deeper pool of candidates. At the same time, however, candidates are able to manipulate the traditional hiring process. Often, interview questions are published on sites like Glassdoor, allowing candidates to customise their resumés and prepare answers in advance. While it is hard to argue against preparation, having insider information also means capabilities are sometimes misrepresented.

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Companies are combating this by changing their markers for predicting success; the credential-based market of the past is irrelevant. Instead, prospective employees are faced with problems where recruiters can pinpoint certain aspects of critical thinking that they’ve marked as important. For example, Google assesses customer interaction with problem-solving exercises.

This new process is like hiring musicians. When a bandleader is looking for new bandmembers, education is largely irrelevant. Rather, abilities and personality are assessed in real-time to gauge qualifications.

Adapting to a targeted, data-driven approach to hiring is a critical task. Some 8th graders are better at coding than MIT graduates. As such, companies are taking into account informal channels such as Instagram to find untapped talent.

The Revolution in Recruitment: The Rise of Predictive Hiring
Image from Shutterstock.

When should family businesses consider letting an employee go?

Again, innovation is a critical attribute. So, if employees aren’t innovating in some way, their employment should be reconsidered. Survival in the information age requires a continuously developing workforce.

If employees lack contemporary skills, then they are not providing optimal service to their employers. Thus, self-directed learning is the linchpin of the modern workforce.

How is the rise of the freelance economy changing recruitment?

An economy where employees come and go as freelancers poses a risk to conventional employers for three reasons. First of all, when an employee leaves a business, that business loses the wealth of knowledge they accumulated over their career. Secondly, there is a vacuum left behind when they are no longer a part of the relationships they have built. Lastly, they may not be up to date with the relevant technology or practices of the company.

That said, there are also advantages to employing freelance workers in that they fill a niche for a finite time or requirement. However, considerably more value exists in the dependability and longevity of a permanent hire. Businesses cannot afford to have talent walk out the door.