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Leadership Hiring   | 4 Min Read

Leadership Hiring: Why Organizations Fail

Written By Romila Kanchan

Most organizations, small or large, are not happy with the leadership talent that they are able to hire. In fact, according to a recent McKinsey Study, more than 70% of organizations are unable to find the right leadership talent. Is it because of a leadership talent shortage or because organizations are not able to engage meaningfully with the talent enough to successfully hire them? Our study revealed that both the reasons are equally responsible for the low leadership hiring success rate of organizations.

While the shortage of quality leadership talent is making having a ready internal succession pipeline an absolute requirement, the horde of options that every applicant is presented with is necessitating the need for having a robust hiring process in place.

Our research revealed four key challenges that limit the ability of organizations to fill leadership vacancies with the right talent.

leadership hiring challenges

Leadership hiring bottleneck #1: No internal pipeline of candidates to take up leadership positions

Leadership hiring, on-boarding, and development typically take a lot of time. In the absence of a succession pipeline, organizations are forced to hire from outside, every time there is a leadership vacancy that needs to be filled. What this means is that you need to start looking for talent ~1 year or more in advance (before the vacancy becoming available), to ensure that the new hire is ready to take on the reins on time. Apart from time, leadership hiring is also a cost-intensive activity. For all these reasons, most leadership hiring experts advise that organizations look for leadership talent internally first as it makes the hiring process faster, cheaper and yields a higher success rate.

Stephanie Troiano, Marketing Manager at ‘The Hire Talent,' shared why they always look for talent internally, when hiring for a leadership position “I think, in general, we always want to look internally before hiring for any position. A leadership and management position is typically a costly role to fill, so the better equipped we are to hire internally in the form of promoting an employee, the better. Growing talent within an organization has its obvious benefits, saving time and money in the hiring and recruiting process is one of them".

Also, with a scarcity of leadership talent in the market, not having an internal pipeline of high potentials, adversely impacts an organization’s chances of finding the right talent fit for their leadership vacancies.

34% of organizations state ‘lack of internal leadership succession pipeline’ as the biggest challenge when it comes to filling a leadership vacancy.

Given a strong internal talent bench, promoting leaders from within has a success rate of 70-80% relative to a 50-55% success rate for external leadership hires.- Kim Turnage, Ph.D. - Director, Leadership Consultant - Talent Plus

The simple solution to having a ready succession pipeline always is by continuously identifying high potential employees who have the capability to take up and deliver high performance in leadership positions. Organizations must work on accurately identifying high potentials early on in their career so that they can retain them, and overtime nurtures their talent to make them ready for their future roles.

The nurturing of high potentials via structured and targeted leadership development programs is required to successfully mold high potentials into leaders.

Leadership hiring bottleneck #2: Long hiring lead time

By having a long hiring process, organizations incur the risk of having a high candidate back out rate. Companies end up losing out on good leadership talent if their hiring process is too long as the best talent is off the market within ten days.

Bill Hughes, Senior Director of Talent at Patina Solutions (an Executive Search Firm) acknowledges that organizations incur huge talent pool drain due to long hiring processes - “The biggest challenge faced when hiring leadership is competition. Good talent is in high demand, so some of our candidates have a lot of options. When some clients delay a decision, the candidate may have taken another position and is no longer available.”

27% of organizations consider long hiring lead time as the biggest factor that is responsible for their inability to hire and on-board the right leadership talent.

Bottleneck #3: Inaccurate hiring methods

Organizations often complain about lack of quality leadership talent available in the market, and yet only 33% of companies feel like they're using the right hiring methods to measure the quality of hire, and only 5% believe their methods are "best in class" (Ben Slater, VP Growth at Beamery). The inability to identify the right talent by assessing their skills accurately causes 23% organizations to misjudge and reject the right talent, only to select the wrong one.

According to Helen McPherson, Principal Consultant at McPherson Consulting Group - “A hiring manager's own experience and judgment - along with the right tools and training - can go a long way, when it comes to identifying the right leadership talent during hiring.”

Even with a high-quality talent pool to choose from, organizations can still end up hiring the wrong talent if they are not aware of the skills that the job role requires and assessing the candidates to check if they have those skills.

  • Role of job role wise competency frameworks: Provides a guideline in terms of what skills are needed in each job role and what skills to assess in job applicants during hiring. Also helps in the selection of the right talent assessment tools that are most apt for assessing the required job role wise skillset.
  • Role of talent assessment tools: Provides an accurate medium via which skills can be assessed thoroughly in each applicant to identify those having the necessary type and level of skills to ensure perfect job role fitment.

Bottleneck #4: Poor knowledge of who to hire

The job responsibilities associated with most leadership roles is continually changing and expanding. The ability to accurately identify the skill sets that will be needed in a leadership role, now and in the future, can help organizations hire quality talent, who will continue to deliver results for a long time and overcome challenges time and again. Organizations need to be highly aware of the skills that they want their leadership hires to have. Organizations often get stuck in a vicious hiring cycle because they are not sure of the kind of leaders they want to hire.

I've seen organizations have great financial success, look to grow, and hire leaders into middle management positions as the hierarchy expands, only to lay off these very leaders first when times get tough. While these situations are often unavoidable, the main problem lies in why they hired these individuals in the first place.”- Helen McPherson, Principal Consultant at McPherson Consulting Group

16% of organizations are unable to find the right leadership talent as they are not aware of the kind of talent that they want to hire. To play safe, Helen recommends that organizations should employ well-rounded individuals that can take on leadership roles in multiple areas, instead of hiring for very specific skills in their areas of growth. So, if things don't work in the new area, they are not left with an individual whose sole contribution to the company is no longer relevant.

Hiring leaders that fit into the company culture, can motivate employees, and understand the organizational mission will prove to be worth your investment even during times of pivot, Helen further advises.

Leadership development challenges: company size wise

While the challenges discussed before represents the consensus of organizations (of different sizes, industry, and region) in general, a further breakdown of problems by ‘organization size’ revealed that although the challenges remain the same, their impact changes.

For larger organizations, the biggest challenge hindering their ability to find the right leadership talent is ‘long hiring lead time’, whereas for smaller organizations the biggest challenge is ‘lack of internal succession pipeline’.

Helen shared her own experience of why large organizations have long leadership hiring processes - “Large companies will often have multi-step interview processes. Think phone interviews with one manager, then flying multiple applicants in and paying for hotel stays to interview with other levels of management, then another round that may include additional questions and assessments-- until the potential hiree is so far into the process that he/she has dedicated weeks, if not months, of his/her life to get this job. A smaller organization will, maybe, hold 1-3 rounds of phone and in-person interviews with a small pool of applicants.

Larger organizations have multilayered hiring processes in place which increases their hiring lead time. This is a big challenge as long hiring process causes ‘talent pool drain’ as candidates back out in the middle of the hiring process.

Small organizations focus all their effort on overcoming everyday operational challenges, which leaves them with almost no time to plan ahead and prepare themselves for the future. SMEs often do not have a structured learning & development, succession planning, and high potential identification process. This is why most small organizations have no internal pipeline of talent to take up leadership positions, which adversely impacts their ability to build a successful leadership team.

Larger organizations struggle with long hiring processes while small organizations suffer on account of non-existent succession pipeline

 

LEADERSHIP HIRING CHALLENGES COMPANY SIZE WIZE

 

Solution: Use of competency frameworks and talent assessment tools

The biggest reason why leadership hiring processes fail is that HRs are unsure of what skills to assess and how to assess them. Job-role wise competency frameworks provide HRs with an overall outline of skills to assess in candidates. Let’s say a job role requires 10 competencies to perform it. The HR now can structure hiring rounds in a way to assess each competency at least once. They can also at any point in the hiring process be sure of how many competencies have been assessed and how many are remaining to be assessed. Based on that they can make an informed decision regarding how many more hiring rounds will be needed to thoroughly assess the candidate to test his/her fitment in the job-role.

Talent assessment tools provide a scientific and data-backed method to assess each competency included in the job-role competency framework efficiently while also providing a delightful candidate experience. The fact that talent assessments can be taken remotely and hence the candidate does not need to travel to a designated location at a specific time multiple times to complete the hiring process, makes it more candidate friendly.

With new age tools such as simulators, assessment centers and gamification of assessments, the hiring process has become more interesting and convenient for the candidate. For organizations, usage of these tools can make the hiring process more accurate and thorough in identifying talent that possesses the right skill-set for any job role. It also helps in re-branding organizations to make them look more future ready, employee friendly, creative and interesting. All this, on top of making the hiring process shorter and easier to execute definitely makes use of the latest hiring tools a must to achieve hiring success today and in the future.

Let’s see how adopting talent assessment tools and competency frameworks help overcome all the 4 bottlenecks:

 

LEADERSHIP HIRING CHALLENGES METTL

GET ACCESS TO THE LEADERSHIP HIRING TRENDS 2019 REPORT

 

 

 

Topics: Leadership Hiring

Originally published June 19 2019,updated October 12 2019

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