Information Technology Industry
Human resource management is the cornerstone for the success of any organization. The process of recruitment of employees with required skills and desirable talents, which also fit in the overall culture of the organization, becomes all the more crucial in the wake of challenges faced by human resource managers. It is therefore required to understand nature of difficulties faced in the recruitment process. This report studies the case of Information Technology industry by identifying the challenges faced by the industry in recruiting suitable candidates. The report further suggests the strategies to address these challenges. Lastly, the report concludes with recommendations.
The global information technology industry comprises of businesses related to software, services, hardware, telecommunication, and related products and services. The size of the industry is estimated at $3.8 trillion by the end of 2016 (Bothner, 2005). The market of the United States itself account for around 28% of the total industry, but last decade has witnessed a shift in global share with the growth of IT markets in Asia, led by the rise of China (Lavie, 2007).
The workforce engaged with information technology is classified in two: one is the set of people engaged directly in information technology sector, and other is the set of people engaged with technology related job roles in IT department in other industries. Both the segments employ a large number of people belonging to technical as well as non-technical job roles. For instance, the United States IT sector alone employs around 5.9 million workers in departments such as IT, HR, Marketing, Admin, Finance, etc. Moreover, workers engaged in IT departments of other industries amount to around 5.04 million (CompTIA, 2017). The huge size of IT industry and perceived demand of technically skilled labor have resulted in the proliferation of engineering colleges across the globe, especially in Asia, adding in labor force plethora of workers with technical degrees.
The main challenges facing recruitment in IT industry are labor supply/demand mismatch, cumbersome hiring processes, organisational branding, and retaining the workforce. Let us look at each one of these in detail.
Labor supply/demand mismatch: There is a huge labor supply/demand mismatch the IT industry worldwide (Freeman, 1991). In the US alone, there are more than 6, 00,000 open IT jobs nationwide, while less than 45,000 students graduated in the workforce in 2015. An additional dimension which exacerbates the problem is over reporting of vacancies, with as much as four vacancies for each developer.
Cumbersome hiring processes: The hiring processes of IT industry are known to be slow and cumbersome (Daley, 2012). While job listings are proliferating, the time taken to respond back to suitable applicants can be as long as two months. This leads to losing out on the top candidates as they are inundated with offers from competing organisations as well and are forced to make acceptance decisions while the organisationsare trundling through its hiring process. Even if these prospective candidates are captured as applicants during the early stages of the recruitment, it is very unlikely that they are still available by the time the organisation reaches the last stages of its recruitment process (Collins & Smith, 2006).
Challenges in Recruitment
Organisational branding: The IT industry is a candidate driven market where the demand to fill positions far exceeds the supply. This is troubling for recruiters as they have to fight in the competitive talent-driven market for a small pool of candidates, especially at top level management positions. Recruiters who are not quick here lose out on converting great candidates into game-changing employees. The recruitment process needs to be prompt to capture the game changers. At the same time, the organisation runs the risk of losing out on candidates with an aggressive recruitment strategy like cold calling or headhunting candidates. The organisation needs to draw a fine line between lethargic hiring process and aggressive hiring (Allen et al., 2007). It needs to export an irresistible workplace image to stand out in the crowd of potential recruiters. It is here that most organisations struggle, i.e. in building a good employer brand. Only a handful of companies like Google has made their mark in this domain. Google always attracts the best talent due to the image it has in the mind of prospective candidates. Investing in organisational branding will give the organisation a major advantage in attracting top talent (Wilden et al., 2010).
Retaining Workforce: More than 50% of people employed in the Information Technology industry are members of Generation Y or Millennials (born from the early 1980s to early 2000s). Millennials have different occupational values than previous generations. As more and more people from the previous generations begin to retire, millennials are bound to dominate the majority of the workforce of most companies. They possess different characteristics from previous generations. They tend to be technology savvy, are active in social networking and work in varied teams. They are comfortable in working with people from different cultures and geographical areas. They tend to have to prefer a relaxed and flexible work environment and do not like strict regulations. They tend to place personal needs at the forefront which at times do not align with the organisation they work for and are usually do not keep a job for more than a few years. This, in particular, is emerging as a big challenge for the recruiters. The companies invest a lot of money into recruiting and training a candidate and this amount comes to nothing when the employee leaves within a span of two years (Jackson et al., 2001). This increases the work pressure on recruiters who have to always keep finding suitable candidates to fill in ever vacating positions. It is thus of the utmost importance to retain millennials and the companies need to be quick to adapt to the personalities of their evolving workforce.
The key strategies for efficacious recruitment in the IT industry are reducing the labour supply/demand gap, streamlining recruitment processes, building a strong employer brand and reducing labour supply/demand gap. Although the industry cannot dynamically increase the number of people graduating in IT, it can definitely solve a part of the problem by carefully drafting job specifications so that redundant vacancies are not put out into the market (Armstrong & Taylor, 2014). This can be easily achieved by re-appropriating duties or enhance skill sets of existing employees by training courses.
Strategies
Streamlining recruitment processes: Organisations need to sit down and evaluate their existing recruitment processes and prune out the unnecessary processes. Some of the things which can be done are:
- Easing the application process – Not asking for too much detail just as much is needed to assess the candidate’s qualifications and interest in the organisation. Some Organisations require the candidates to prepare lengthy profiles, fill in application forms along with sending in CVs and share personal information. All these details can be done away with.
- Developing Mobile technology-enabled platforms for recruitment – If the positions advertised by the companies are not accessible on a smartphone or the application forms can’t be easily filled on the phone, the companies will lose out on a whole set of job seekers.
- Promptly follow up with candidates – The companies should have a prompt follow-up process which informs the candidates of their application status at various stage of the hiring process as this is the first step towards relationship building. It also goes a long way in building a good employer brand.
Building a strong employer brand: Investing in building an impressive employer brand will give the organisation an edge over others in attracting and retaining top talent. The way to go forward with this is social media and marketing. As most of the prospective employees today are Millennials, who are active in the social media space, investing in building a strong social media presence will definitely benefit the organisation in attracting more people.
Conclusion & Recommendations
The main challenges recruiters face in hiring the right candidate in the IT industry are labor demand/supply mismatch, cumbersome hiring processes, standing out from the crowd and retaining the workforce. Retaining workforce has emerged as a pressing challenge in today’s times due to the change in workforce dynamics. The workforce today is totally different from the early boomers of the 70s. One of the key distinguishing features is that while the previous generation loved security and tended to stay with their organisation, the millennials have far more fluid careers. The organisations need to provide more conducive work environment by evolving with changing workforce.
Other strategies which can be adopted for effective recruitment are reducing the mismatch between labour demand and supply by working on the demand side of the graph. By removing redundant vacancies from the market, the mismatch between demand and supply can be reduced. Streamlining the recruitment process will enable the organisation to acquire the most suitable candidate. Organisations need to adopt simple recruitment process which allows the candidate to stay interested in the position. Lastly and most importantly, the focus of organisations should be on building strong employer brand which conveys a positive image in the minds of prospective candidates.
References
Allen, D. G., Mahto, R. V., & Otondo, R. F. (2007). Web-based recruitment: effects of information, organizational brand, and attitudes toward a Web site on applicant attraction. Journal of Applied Psychology, 92(6), 1696.
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
Bothner, M. S. (2005). Relative size and firm growth in the global computer industry. Industrial and Corporate Change, 14(4), 617-638.
Collins, C. J., & Smith, K. G. (2006). Knowledge exchange and combination: The role of human resource practices in the performance of high-technology firms. Academy of management journal, 49(3), 544-560.
CompTIA. (2017). 2016 IT Industry Outlook – IT Industry Trends Analysis. Comptia. Retrieved 24 May 2017, from https://www.comptia.org/resources/it-industry-outlook-2016-final
Daley, D. M. (2012). Strategic human resource management. Public Personnel Management, 120-125.
Freeman, R. (1991). Labor Market Tightness and the Mismatch Between Demand and Supply of Less-Educated Young Men in the United States in the 1980s. Mismatch and Labour Mobility.
Jackson, D., Mannix, J., & Daly, J. (2001). Retaining a viable workforce: A critical challenge for nursing. Contemporary Nurse, 11(2-3), 163-172.
Lavie, D. (2007). Alliance portfolios and firm performance: A study of value creation and appropriation in the US software industry. Strategic management journal, 28(12), 1187-1212.
Wilden, R., Gudergan, S., & Lings, I. (2010). Employer branding: strategic implications for staff recruitment. Journal of Marketing Management, 26(1-2), 56-73.
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