In March of 2018, two years before COVID-19 upended our personal and professional lives, the job market was already competitive. Then, there were as many job openings in the U.S. as unemployed people actively looking for jobs: 6.6 million1. Four years later, the labor market is twice as competitive, with 11.3 million2 job openings and 5.7 million3 unemployed Americans actively looking for work.
With top talent receiving multiple job offers, some companies try to “sweeten the pot” by mailing congratulatory gift boxes to candidates’ homes. While swag bags might appear, on the surface, a fresh way to win over talent, they’re one-sided, staged, and superficial—like many traditional tactics designed to drive a positive candidate experience.
Competing for talent by touting office perks (state-of-the-art coffee machines, yoga rooms, ping pong tables) is a relic of the past. Instead, the Distance Economy allows employees to interact digitally and remotely from all corners of the world. In the absence of physical interactions, human relationships are more important than ever.
Today’s candidates don’t want smoke and mirrors; they want transparency and trust. Unimpressed with gifts and in-person perks, they seek deeper connections and intangibles. Flexibility. Employee well-being. Company culture. Mission. Values. Ethics. Commitment to DEIB. Social good. Environmental impact. (And, of course, good pay and benefits.)
Winning the war for talent is about moving beyond the one-sided, staged candidate experience to the two-way, genuine candidate relationship. Companies that take a human-centered approach to talent acquisition are 2x more likely to achieve financial goals4.
In March of 2022, we surveyed 560 HR, talent, and recruiting leaders across the U.S. to understand their most critical hiring challenges—and how they’re meeting the demands of modern candidates in a changed hiring landscape.
We hope you bring these data insights back to your team and inform your colleagues of the trends impacting their work.
Co-Founder | GoodTime.io
1 www.bls.gov/opub/ted/2018/mobile/1-unemployed-person-per-job-opening-in-march-2018.htm
2 www.bls.gov/news.release/jolts.nr0.htm
3 www.bls.gov/news.release/empsit.nr0.htm
4 www.joshbersin.com/definitive-guide-recruiting
It’s hard out there for HR and talent leaders. In 2021, companies fell 50% short of their hiring goals and felt the sting of the Great Resignation, evidenced in part by the number one reported hiring challenge: retaining top talent. As employees resigned for greener pastures, companies scrambled to backfill roles, hiring 108 new employees, on average, in 2021.
Indeed, the hiring landscape became more competitive due to an increased demand for talent. Exacerbating the problem was a lack of qualified candidates due to the supply/demand gap. Increased selectivity among job seekers played a part, too. In search of meaningful benefits5 and relationships, candidates quickly pass on job ads—and offers—if they don’t see the intangibles they seek. Further complicating the issue, one-quarter of companies reported competing for candidates who receive multiple offers.
Hiring in 2022 will be an uphill battle, intensified by recruitment team turnover. Most respondents expect the same hiring challenges to persist over the next twelve months, in line with analyst predictions that hiring will remain difficult this decade. However, there was some disagreement between HR leaders by job level (CHRO vs. VP vs. Director).
Antiquated pre-COVID tactics—flaunting nap rooms and massage chairs—are, and will continue to be—ineffective in wooing top talent. Today, 46% said creating meaningful relationships with candidates is more important than ever.
When asked to select the most valuable steps companies could take to improve candidate experience, respondents cited prompt communication, transparency in the interview process, and a genuine connection to the hiring team. All three items are candidate-focused hiring practices. Ultimately, efficient hiring processes provide HR teams the space to create meaningful candidate relationships, helping companies win top talent faster.
Approximately what percentage of your hiring goals did your company attain last year?
Approximately how many employees did your company hire over the past 12 months?
Some assume that fully in-office companies have the most challenging time retaining talent; however, that wasn’t the case. Sixty-three percent of fully-remote companies selected “retaining top talent,” far above the average (30%). And while 34% of fully or mostly remote companies struggled with a lack of qualified candidates, only 22% of fully or mostly in-office companies reported the same challenge.
While the Distance Economy widens the talent pool, it also widens the employer pool, making it more critical for remote and hybrid companies to take meaningful steps to retain, attract, and win candidates.
Which of the following hiring challenges, if any, has your company experienced over the past 12 months?
Which of the following hiring challenges, if any, do you expect to experience in the next 12 months?
Forty-seven percent of HR leaders agreed that “the hiring landscape has become more competitive due to an increased demand for talent.” This sentiment aligns with most headlines and analyst reports.
However, the No. 1 selected item (45%) among CHROs was “the hiring landscape has become less competitive due to an increase in available talent who have recently quit their jobs.” Directors were 34% less likely than CHROs to agree (32%). Employees who are more closely involved with day-to-day recruiting work have a different perception of business functioning.
How would you say that the hiring landscape has changed in the past 12 months?
When asked to look ahead to the next twelve months, talent leaders said they’d continue to see the same top five hiring landscape changes. However, “the ability to create meaningful relationships with candidates” surpassed “the hiring landscape has become more competitive due to an increased demand for talent” to claim the number one spot on the list.
How do you expect the hiring landscape to change in the next 12 months?
Interestingly, while nearly one-third (29%) of companies struggled with a lack of qualified candidates last year, more than half (54%) reported an increased acceptance rate. Moreover, of those companies who saw increased offer acceptance, 44% rated their recruiting process as excellent—a sign that investing resources to improve the hiring process can pay off.
Additionally, excellent recruiting processes aren’t just about efficiency; they’re about relationships. To meet candidate demands, companies are re-imagining the recruiter role: modern recruiters aren’t salesy; they’re business-savvy, empathetic, and adaptable6.
Over the past 12 months, has your acceptance rate increased, decreased, or remained about the same?
Acceptance rates may be improving for some, but time-to-hire is increasing alongside, further straining under-resourced recruitment teams. Moving fast is critical to winning top candidates; however, the average time-to-hire among respondents was three weeks.
Over the past 12 months, has your time-to-hire increased, decreased, or remained about the same?
Even though the smallest companies (50-250 employees) saw the most considerable headcount growth, all companies experienced the same average time-to-hire: 3 weeks.
Teams will need to reevaluate their hiring processes, tools, and people to compete in today’s environment where speed and relationships are essential. Creating meaningful candidate relationships is a top priority in today’s labor market, but what exactly does that entail?
On average, how many weeks is the overall hiring process to hire a new team member, from original posting to candidate acceptance?
Job seekers have had the upper hand for almost a decade since unemployment levels shrunk to less than 6%7. In 2016, millennial’s—who seek equity, transparency, flexibility, and purpose8—became the predominant generation in the workforce. Meanwhile, a paradigm shift emerged: employees are not “cogs in the machine.” Instead, companies should treat employees as equals.
COVID-19 further complicated the workplace. Lines between home and office blurred, while people realized time is our greatest asset. No longer content with working solely to earn a paycheck, candidates began seeking a genuine connection with their workplace.
The study presented the panel with one-sided, staged hiring practices (e.g., free lunch during the interview) and candidate-focused hiring practices (e.g., flexibility in scheduling during the interview process). HR leaders at all levels selected the one-sided, staged items least often, which indicates superficial interactions are losing ground in The Distance Economy. The candidate-focused hiring practices can be split topically into four buckets.
Four key pillars of healthy candidate relationships are:
Surprisingly, although 46% had previously said, “The ability to create meaningful relationships with candidates has become more important than ever,” only 36% looked to build better candidate relationships in the past twelve months.
Companies have good intentions but struggle with execution. Building relationships takes time and forethought; it’s a mutual, authentic experience that requires training and messaging alignment. Teams must carve out space to tackle this.
Improving hiring process efficiency through efforts like meeting optimization is an intelligent way to create space and time to enhance candidate relationships. Thus, it’s no surprise “improving overall efficiency” was the most selected item—especially considering 60% suffered an increase in time-to hire last year.
Over the past 12 months, what areas did you look to improve in your hiring process?
Over the next 12 months, what areas will you look to improve in your hiring process?
With more than one-third of total work hours spent scheduling interviews, it’s clear why improving overall efficiency was the top selected item on the previous chart. An efficient hiring process provides recruiting coordinators with more time and creative bandwidth to focus on delivering better candidate relationships versus doing rote scheduling tasks. Thus, if HR teams improve efficiency and build meaningful relationships, they can expect to spend less time scheduling interviews and perform better against their hiring goals.
Time-to-hire was consistent across company sizes; there was little variability here too. For example, the smallest companies (50-100 employees) spent 33.5% of their time scheduling interviews, while the largest companies (1,001-5,000 employees) spent 35.1% of their time doing so.
What percentage of your recruiting team’s time is spent scheduling interviews?
Which of the following do you communicate to candidates during the hiring process to attract top talent?
“Our current interview process was designed intentionally to reflect our core values and company culture.”
While the first seven items on the list are candidate-focused hiring practices, two others—office tours and free lunch—are relics of the past. Unsurprisingly, these ranked lowest. The majority of companies realize these aren’t how to win in today’s Distance Economy. More companies are beginning to move away from old-fashioned, superficial tactics in favor of genuine connection, transparency, adaptability, and candidate well-being.
What, if anything, does your organization do to build a meaningful relationship with candidates during the recruiting process?
There is a clear correlation between the number of candidate-focused hiring practices selected and the percentage of hiring goals met. Companies implementing seven candidate-focused practices from the previous list saw a 17.7 percentage point gain in reaching their hiring goals (67.9%, up from 50.2%).
As long as companies selected at least four candidate relationship best practices from the list, they outperformed the average. The business impact of building meaningful candidate relationships is real.
Candidate relationship is about showing candidates what the company stands for and finding meaningful ways to connect with candidates. Companies can take one straightforward action to move the needle in the right direction: ensure “prompt, clear communication on next steps in the interview process.” This action goes hand-in-hand with “transparency in the interview process details.”
“A genuine connection to the hiring team” is harder to procure; however, those human-to-human relationships can seal the deal and encourage candidates to accept the offer—even when they have four on the table.
Below is a list of actions that some companies take to improve the overall candidate experience. Regardless of whether your company currently implements them, how valuable would each of the following be to your candidates?
The findings in section two cast a dull light on the state of diversity, equity, and inclusion in the hiring process.
However, the average time-to-hire among the 179 companies that do communicate their DEIB commitment to candidates is 2.5 weeks, shorter than average (3 weeks). Further, 41% of companies currently measure candidate diversity; it was the second most selected metric. Yet, if companies don’t communicate their DEIB initiatives, BIPOC candidates may struggle to see themselves at your company. This lack of communication leads to fewer applications, missed candidate diversity goals, rejected offers, and less diverse teams.
9Diverse teams produce 19% higher revenue. In the Distance Economy, where remote and flexible work options open the talent pool to allow for more diversity, companies should do all they can to stand up diversity initiatives and communicate those to candidates. Smart companies shortlist DEIB as a top priority.
9 www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation
Which of the following metrics, if any, do you currently measure?
Forty-one percent of companies keep a regular pulse on candidate diversity. However, when asked to select the most important metric, only 13% selected “diversity of candidates.”
One could argue that quality of hire is more important than diversity, and the data here shows that companies agree. Yet companies that prioritize DEIB—more specifically, listen to diverse voices and act accordingly—are 12x more likely to engage and retain employees. Retaining top talent was the No. 1 challenge last year, and HR leaders expect it to be the No. 1 challenge next year; the answer is hiding in plain sight.
Which of the following metrics would you say is most important to your company?
Companies aren’t rolling up their sleeves to make DEIB a measurable priority over the next 12 months; there’s only a two percentage point change YoY.
Thirty-eight percent of fully-remote companies will make DEIB a priority. This is a good move considering fully-remote companies were most likely to say they struggle with a lack of qualified candidates. With a broader talent pool comes more diverse candidates, and an increased need to improve—and communicate a commitment to—diversity.
Over the past 12 months, what areas did you look to improve in your hiring process?
Over the next 12 months, what areas did you look to improve in your hiring process?
Examining the same two questions by respondent job level, C-Level leaders are highly focused on DEIB while VPs and Directors are not. DEIB is the last choice for Directors, both past and future (24% and 29%).
While 59% of respondents said “employee well-being” was the top enticement for attracting top talent, diversity is at the bottom of the list. If an employee is a person of color, is a company considering their well-being if their commitment to DEIB is last in line?
Offering well-being criteria like flexibility (48%) and environmental impact (42%) are more accessible enticements than a DEIB program, which requires more significant resources. However, this isn’t HR’s fault; DEIB must start at the top. High-performing organizations are 4.3x more likely to have a CEO who articulates DEI vision and communicates results. If companies genuinely care about retaining top talent and winning top talent, the C-Suite must partner with HR.
Which of the following do you communicate to candidates during the hiring process to attract top talent?
Ultimately, there’s a clash among three macro trends that are impacting the hiring landscape today:
When it comes to changes in the hiring climate over the next 12 months, respondents confirmed that the ability to create meaningful relationships with candidates would become more important. Seasoned HR leaders know there’s no going back to the old hiring method with one-sided, staged interactions. Instead, the future of attracting, winning, and retaining talent is two-sided, meaningful interactions; HR teams should improve hiring process efficiency first to carve out time to focus on the aspects of relationships that require more time and resources, such as DEIB.
In the Distance Economy with a broader candidate pool, DEIB must be a priority; if BIPOC candidates can’t see themselves at a company, they’ll keep looking.
In this new world, staged, one-sided interactions won’t pass muster. Instead, companies must adopt new tools and tactics to increase efficiency and build genuine relationships with candidates. Focusing on candidate relationships enables companies to hit their goals and win top talent faster.
This report was developed with scientific rigor in partnership with Qualtrics. We began by identifying the population of interest. Qualtrics distributed the anonymous survey to HR leaders, from directors to C-Suite executives. We had 2,675 respondents attempt to take the survey. 680 respondents were terminated either by the security check (either registered as a duplicate or a bot), or for belonging to a category filled, deeming them as an “over quota respondent.” 1,336 respondents were terminated via pre-screening, and 99 respondents were removed by the data scrubs. In this case, 560 completed the survey. We developed the survey questions according to best practices in survey research, ensuring they were clear, concise, and understandable to people with various backgrounds. Questions had response formats designed to balance the richness of data to be collected with the ease of responding. We selected the topics based on a set of research questions identified by subject matter experts as relevant to emerging trends in the hiring landscape amidst the Distance Economy. Together, these actions encouraged participant engagement and high-quality responses while collecting in-depth information about changes in the hiring landscape. No reward was offered as an incentive to complete the survey.
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