As the intensity of competing for in-demand talent continues, hiring for potential is gaining traction as a successful talent growth strategy in Southeast Asia, with 94 percent such hires retained in their jobs. Yet close to 1 in 2 (42 percent) hiring managers in the region remain reluctant to evolve their recruitment strategies beyond hiring based solely on experience, despite the resources required to recruit, evaluate and subsequently manage employees who are not a good fit.
The findings are based on the latest guide, “Grow your Talent, Hire Based on Potential”, by Robert Walters in October 2019, which shared insights on the motivations and results behind hiring for potential as a long-term strategy towards talent growth. Over 3000 respondents, including hiring managers and professionals from six countries shared their views.
“Vying for top talent will be an everyday occurrence as companies accelerate in their digital transformation journeys. This includes a sustained demand for professionals with skillsets, such as in tech- related areas, that may not have existed in as little as a decade ago. As companies become more competitive to attract the right talent, they are moving beyond adjusting compensation packages to consider longer term and sustainable strategies,” said Ling Xiang Lee, Manager of Sales and Marketing, Robert Walters.
Across the region, respondents cited a preference for candidates who can pick up work immediately, the technical nature of the role, and the lack of know-how to evaluate the person’s potential as key reasons for not hiring high-potential professionals. One in three (30 percent) respondents believe that a candidate with the right qualifications and experience will eventually show up.
Singapore Snapshot: Costly and time-consuming to address bad hires
In Singapore, companies found it time-consuming and challenging in identifying quality hires, and those who hire for potential were well rewarded. Over 65 percent of companies took 2 months or more to fill a position. For those who hired high potential candidates, 96 percent proved to be quality hires.
Hiring managers who have not hired a candidate based on potential were mostly unable to find the right opportunity (38 percent), although nearly 1 in 10 (8 percent) were not keen to consider the option at all. Successful respondents shared tips on recognising high potential candidates at the recruitment stage. Top traits that hiring managers look out for are the willingness to learn, the motivation to take up the job and succeed in the role, and engagement (a perceived level of enthusiasm and dedication towards the job).
Despite their best efforts, 1 in 3 new employees turned out to be a bad hire. Close to 1 in 2 (47 percent) of hiring managers shared that the process of recognising a low-quality hire and mutually addressing the situation can take as long as three months to more than a year.
Faced with a shrinking pool of talent who have in-demand skillsets, hiring managers continue to place having relevant experience (64 percent) as the most important criteria. This is followed by the candidate’s ability to learn quickly (57 percent), soft skills exhibited (48 percent) and if they seemed aligned with the company’s culture (44 percent).
Having relevant experience, while commonly viewed as important at the recruitment stage, however proved to be less of a deciding factor in measuring the quality of hire. Top reasons cited for determining a bad hire include the failure to deliver satisfactory work (31 percent), a less-than-desired work attitude (23 percent), and the inability to adapt to the company’s culture (20 percent). Only 8 percent of respondents attributed the lack of relevant skills, knowledge or expertise as a reason for a hire that did not work out.
Nurturing your own pool of talent, especially for niche skillsets
“Candidates who show strong potential may lack some of the job requirements, skillsets, industry knowledge or experience within a role, but demonstrate a positive learning attitude and aptitude, and fits well with your team. By hiring by potential and providing them with the support and training to grow, businesses will find that in the long run, they gain employees who are not only skilled, but also loyal, resourceful and motivated,” added Xiang Lee.
The guide suggested ideas for companies who wish to adapt their recruitment strategies to hire for potential. They can identify what is crucial or secondary requirements to the role, ensure a realistic job description, look out for signs of opportunities or progress in the candidate’s job experience, and engage the expertise of recruitment consultants, especially in hiring talent with niche skillsets.