This Week, In Recruiting - Issue 194

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Open Kitchen: What Happened in Recruiting in 2024? (Part Two)

We're onto Part Two of this four part series, reviewing the major events and trends of the year 2024. There are 20 items, so Part One last week reviewed End of Naive Optimism, Talent Acquisition Teams Getting Smaller, The Job Applicant Flood, Candidate Resentment & the Memefication of Ghost Jobs and How Recruiters Encountered AI & Automation. This week, we're going to review 6-10 - Geographical Job Dispersal, Crisis in Early Careers Hiring, Skills Based Hiring Being Worth the Squeeze, Talent Density and Tech Consolidation.

Let's go 👇

6. Geographical Job Dispersal 

One of the great ironies of hostile de-globalisation on the national level is this enthusiastic re-globalisation at the level of the firm. Who would have thought that making businesses more expensive to operate, increasing pressure to reduce costs, would then drive jobs to places where they can be done more cheaply? And thanks to Covid, we’ve all now had plenty of training on how to collaborate with geographically distant colleagues. In 2024, we’ve seen an acceleration of the trend of new job requisitions to be first considered for cheaper locations outside of the home country, so long as time zone and language remains aligned. Hiring for a software engineer? For US employers, you’re looking first to hire the role in LATAM and Canada, for UK in South Africa, for ANZ it is the Philippines. 

This is a win for employers who can secure top quality resources at well below market rates at home, and - because they are usually paying well above market rate at the new location - they also tend to keep them for longer as loyal employees. For the employees, obviously this is also a great deal. After all, working for a premium salary in a remote job is what everyone thought they were getting before the timeline split in 2022.

The implication for recruiters and HR is significant; it means we need to be global talent intelligence advisors, able to recommend best geographies for the location of the job, based on what we know of skills distribution, working age population, infrastructure quality, language fluency, cultural affinity, legislative risk and geopolitical risk. We then need to get good at navigating all that and hiring efficiently for those roles (s). This is complicated, interesting, high value work and should be a defensible moat against AI disintermediation. 

So far, the majority of the occupations that are being geographically dispersed this way have been low to mid level white collar, knowledge work - we’re talking IC s/w engineers, market researchers, junior associates and yes - recruiters and sourcers. I suspect vested interest by incumbent, HQ based leaders (i.e. ‘hiring managers’) will probably prevent the dispersal of leadership roles this way, so we will end up with an org structure which is probably more neo-colonial than we might like to think. 

Interestingly, front line work is also getting dispersed this way. Advances in tele presence, camera quality and stability of always on connected internet is enabling a whole host of on-premise jobs to also become remotely worked. Fast food cashiering,  security guards and receptionist work in New York can now be performed by a worker in Montevideo, with the ‘presence’ being a front facing Ipad. Also see mining, warehousing, dental practice and even brain surgery - all now being performed remotely, from workers thousands of miles from site. 

We probably thought that we'd arrive at the globalised talent market through ethical pretension rather than economic necessity, but here we are nonetheless.

7. Crisis at Early Careers Hiring

I have a sneaking suspicion that offshoring of jobs is an understated contributing factor to the crisis in Early Careers Hiring. The correlation would be the size of graduate intake vs ratio of jobs being offshored. Somebody should do the research on this!

Industry bodies agree that graduate vacancy growth has slowed in 2024 but in the UK at least, this appears to be minimal. According to the Institute of Student Employers, the growth in graduate vacancies in 2024 is 4%, compared to 6% in 2023.

The application rate per job has increased though, which is in line with what we see in every other job category; economic insecurity is leading to highly motivated job seekers, who are now using AI to increase the numbers of applications they are doing. According to the latest research from our friends Arctic Shores, 88% of the graduate job seekers have used or would use AI to support their job applications, up from 72% in 2023. We can expect job candidates to use AI to outpace employer counter measures. That ⅓ of ISE employers are still instructing candidates not to use AI, tells me that those ⅓ have not implemented any other solution and are trying to deter usage rather than redesign their hiring practices to deal with the inevitable. This means that time to hire will be slow as convention hiring funnels get overwhelmed by Personalised Mass Apply. Spoiler alert for the predictions series in early 2025, but any tech assessment / filter solution which can convert 1000 to 10 job applicants is going to be in good shape. 

Theory: Artificial intelligence has a variable impact on early career hiring based on the size / maturity of the employing organisation. We know that the impact of AI right now is taking away the routine, mundane tasks - those most typically performed by junior employees learning their craft. Yet this also means that AI is a big equaliser on the value of experience - it helps junior inexperienced, unskilled employees most. How this manifests in early entry hiring is that small companies will do less of it, as experienced colleagues use AI to scale capacity where they might have once relied on junior staff, but large employers might do more of it, as CEO’s see the opportunity to make significant reductions in payroll by replacing expensive, hard-to-manage senior pro’s with inexpensive, AI-enabled graduates grateful for a job. 

Just a theory.

8. Skill Based Hiring (Is the Juice Worth the Squeeze?)

It’s been a great year for the debate on Skill Based Hiring. 

In the People Business, we have an annoying habit of adopting concepts without sufficient question or debate. 2024 was a welcome corrective as we’ve seen both powerful evangelism and convincing rebuttals to the idea of Skills Based Hiring.  

Evangelists can point to an increasing body of knowledge from community members who have implemented SBH whole or in part; the case studies are accumulating, as are the how-to guides from those practitioners who have been good enough to share their learning. We’re even starting to get some data on how SBH can have a positive impact on key hiring metrics like TTH, QoH and DEI. Check out the Brainfood Larder if you're interested in any deeper dives into any of this.

The critics also had their say. There are practical challenges to moving to SBH so much so that it may make any gains not worth the effort. This was superbly articulated by Brian Heger his essay, Is the Juice Worth the Squeeze - one of my favourite essays of this past year. Others argued that the suitability of the SBH is dependent on organisational structure and ultimately, what your business actually does. For Management Consultancies (where the idea was likely manufactured…) it was perfect paradigm as the inherent looseness of organisational structure, the internal movement from project to project, the client driven resource demands and the constant performance evaluations and maintenance of the currency of skills meant that SBH was perfect for PS, but perhaps less for a, say, a coal mining company. 

Healthy debate is essential for the testing of ideas, with the introduction of nuance playing a key role in ensuring that we do not succumb to the temptations of tribalism. In the end, it will mean that whichever path we choose to go, we will be more informed on our decision and perhaps more effective in our execution of it, if we knew in advance what the challenges might expect. 

Recruiters and HR probably can’t afford to not experiment with SBH though. The practical challenges articulated so powerfully by Brain may in time be ameliorated by AI - they are after all, mainly data problems. And we also know that LinkedIn - and likely Microsoft - together the most powerful single entity influencing the way we shape the future of work - seemingly are all on board the SBH train. Do an experiment in 2025 - at least.

9. Talent Density

Another old idea which got a fresh rebrand in 2024 was ‘Talent Density’.

A term coined at Netflix by CEO Reed Hastings, Talent Density is about hiring the most talented people in your business and ensuring that the calibre of the hiring does not drop even as the pressure to hire increases. It’s really a rebranding of ‘A Player’ hiring, an idea which lost acceptability when it became associated with bias, credentialism and tech bro culture during the peak DEI era. It made its comeback in 2024 when Coinbase - a leading proponent of mission based businesses reset its hiring bar by creating additional tiers of assessment of candidates, notably C-level involvement in every hire, defaulting to ‘no hire’ in case they are not bar raisers and so on. 

Talent Density was harder to practice during the hyper scaling era than it is today. We don’t have pressure to hire ridiculous numbers of people; on the contrary, employers are being defensive with headcount and new job requisitions are already going through extended DD before being opened. This is the perfect time to do ‘Talent Density’.

Things are going to have to change though, most notably the measures. How many recruiters here are still targeted by headcount? Probably all of us. This is no bueno in a Talent Density framework because hiring a B player is worse than not hiring anyone at all. Adriano Herdman has been great in publish one page canvasses like the image above. Go follow him if you want some input on QoH.

Recruiters face a fork in the road here: either we deny responsibility for QoH, because we can only control for the quality of the candidates we introduce to the hiring manager (Quality of Submission) or we embrace responsibility for QoH and expand scope toward Performance Management of hired employees. In the pre-AI world, the former was the right move. In the post-AI world we’re in today, the latter is the only move. AI has a fundamental de-siloing impact on data warehousing. What was once separate and inaccessible (owned by another department, on a different tech stack, written in a differ corporate language) will become immediate, indistinguishable and accessible to all. 

One of the big projects for Talent Acquisition in 2025 will be to transition toward Talent Everything. CEO buy in to Talent Density will inadvertently carry us there.

10. Tech Consolidation

That AI will de-silo data warehouses also means that we’re going to need less data warehouses. In fact, we optimally need only one. Now this would’ve happened in any case as the logic of having discreet systems is superseded by the greater value to be unlocked by having a consolidated system which connects all the data, on demand, but it has been accelerated by the shift in economic environment which we’ve already discussed at length in Part One. Higher costs of running business, slower economic growth, means less budget for hiring, which means less spend on tooling for hiring. 

Credit to the vendors who saw this coming; many in the industry criticised the likes HiBob, ScreenLoop, Gem and even Revolut for building ‘yet another ATS’ but the strategy of building a core platform for what may be a smaller audience might in the end be a better business decision than sticking with a disposable point solution for a larger audience. 

I don’t see a problem with increasing market fragmentation with ATS’s - it simply means we have an immense diversity of organisation types, each with their own specific combination needs, each with their own order of priorities. I think this TA Tech map from Glenn Lindley shows some idea of the complexity of need!

Every tech vendor has been expanding functionality - CRM building ATS, ATS building HRIS, HRIS building CRM. The era of multiple tools integrating with each other is giving way somewhat to multifunctional single tools. AI is making it easier for product makers to make these features, whilst the same technology wave is also eroding the boundaries between software categories. That chat interface points to a future where the UI is all the user ever needs to see, whilst multiple modules or seamlessly interoperable products each feed into the combined data lake. 

The implications for the People department should be obvious. As tools consolidate, so will departments. It would be interesting to know how many Talent Acquisition leads have already moved into more expansive People & Culture roles in 2024. One way to take advantage of talent density, doing more with less, shrinking company size - is to embrace the expansion of scope, even if the workload seemingly expands beyond capacity and - for the moment - for no greater pay. What we have to do as a growing business leaders is to get better at negotiation priorities and articulating the vision of what can be achieved through 'holistic HR'.

Subscribe to this newsletter if you want to see Part Three, next week

Now out of the kitchen, onto the lounge 👇

What's Going On?

Big List of Recruiting & HR Events to Attend in 2025

Ok folls, so 2024 events have been shuffled off onto another sheet - well done on everything putting on events this year - event organisers amateur or pro - I salute you! Mean while, 118 events already in the Big List for 2025 - make sure you are bookmarking this spreadsheet, and adding to it. Please also make sure event organisers locally to you know about this! Cheers.

TA Leadership Dinner at MOMO Restaurant in Amsterdam, 11th December, 5.30pm - 8.30pm CET

Friends, I am organising a TA leadership dinner with our friends GoodTime, TheTruthWorks and MatchHR. My job is the moderate a conversation on the State of Talent Acquisition in the Netherlands in 2024 and beyond with the legendary Kobi Ampoma, Head of Talent Acquisition at The HEINEKEN Company and Anastasia Pshegodskaya, Director of Talent Acqiuisition at Remote.com. Spaces are out but if you want to attend, email [email protected] to get on the waitlist.

Brainfood Live On Air - Ep286 - 2024 in Review - State of Talent Acquisition, Fri 13th Feb, 2pm GMT

It's final episode of our review series of 2024 - what is the State of Talent Acquisition? We are bringing together community managers, heads of function, as well as talking heads to establish exactly where we stand after another challenging year in industry. We're with Emma Mirrington, CEO (The Talent Labs), Becky Lee, Global Early Careers Transformation Leader (Join Talent), Andreea Lungulescu, Founder (TA Talent Crunch) & Jim Miller, Head of Talent (Ashby) and friends. Register here

FiesTA, 23-24 January 2025, Bangalore, India.

Delighted to be invited back to Bangalore for this new event to talk about the Next Decade of Recruiting. We're going to have to track long term trends in human capital formation, demographic crisis, climate change, new energy transition and more in what should be the most sci-fi talk I've ever given. It's only 2 months away, so I had better get ready in preparing it!. Tickets here - DM me if you want discount code.

NJA* People & Talent Summit, Thursday 13th March, 2025, Fishburners, Wynyard Station (Sydney)

I'm back in Sydney folks. Thanks to Pam Stevenson, Emer McCann and Anthony Enright for inviting me to come back Down Under. Brand new talk on 'From Talent Acquisition to Talent Everything' - time for the next evolution of the Talent function. Chimpanzees, culture and Ronald Coase will be in this talk. Grab a ticket here

If you have an event, webinar or podcast going on next week and want it featured on next week's newsletter, comment below with the link and event details. Don't forget to at mention me so that I see it

End Notes

We're fast moving onto the Christmas period - thanks everyone who is still banging away at this year at work! I'm going to be making my last external visit of the year to Amsterdam this year and then one more week before a bit of break.

What is everyone else doing - hanging around or leaving to sunnier climes?

Hung Lee is the curator of Recruiting Brainfood, and now This Week In Recruiting. Subscribe to both if you are into recruiting or HR or just interested in world of work.