The Mechanic in a Suit: Harbinger of a Buyer’s Market

October 21st, 2009 by jpassen Leave a reply »

Guest post by Gary Kustis, Ph.D., Sr. Consultant, The Aldridge Group

 

It hit me just the other day when the candidate I was interviewing for a shift mechanic position for a client of mine showed up for the interview in a suit and tie—not the usual dress code for the occasional shift mechanic candidate I might see.  Further discussion led me to discover that he was a young mechanical engineer who was more than eager to start out at the bottom of the plant’s pecking order.  As we sat down together, he told me of his job hunt and why he was so excited by this opportunity.  He had graduated in September of 2008 and was interviewing with a number of big companies looking for young engineers.  However, all those companies who were about to make offers all stopped calling as soon as the reality of the recession hit in October.  Suddenly, my young engineer found himself in a tough spot:  little experience beyond one short summer internship and college loans that needed to be repaid.  For the last year, he’s been desperately trying to find a job in his field while working as a landscaper.  So, now, here he is: applying for a shift mechanic job—and glad for the opportunity.  From the company’s perspective, they get a young mechanical engineer in a shift mechanic job where his knowledge and skills will prove more than helpful while they groom him for better things.  From his perspective, this job represents stability and an opportunity to move up later when the opportunity arrives.

That same day I got a call from another plant within the same company.  They wanted to know what to do about the three hundred people applying for the one job that they had advertised recently.  They had been expecting their pre-recession response of a dozen or so applicants.  Now what?  This phone call wasn’t the first of its kind that I’d received over the last month or so.  Oddly enough, all these callers saw this as a problem rather than an opportunity.  Sure, from a practical standpoint, it raises some issues about how to handle the volume, and there is the implication that costs for screening will likely rise.  However, all these people neglected to realize that the market—the labor one, that is—had turned in their favor.  There are very good candidates out there now and they’re yours for the taking. 

Let’s talk about this from the viewpoint of the “selection ratio.”  The selection ratio simply refers to the number of people hired divided by the number of applicants. 

Selection Ratio =  # hired / # applicants

In other words, how many people do you have to look at before you hire someone?  Is it one out of ten? (A selection ratio of .10).  One out of twenty? (A selection ratio of .05).  What is a good ratio?  Well, it depends to a great extent on the nature of the job (how much knowledge or skill is required?) and how tough it is to find someone (are there a large number of people with that needed knowledge or skill?).  The ideal situation (for the company, not the applicant) is to find yourself with a market full of people who have the skills you need in a particular job.  In this instance, you’ll find that it is worth the extra effort to look at more people than usual, as you now have an opportunity to get the very best employee who has all the characteristics you’re looking for.  For the extra money and effort you’re putting forth, the potential payoff in finding the “perfect employee” is well worth it. 

In fact, the biggest problem you’re going to run into is the same one that I mentioned earlier:  how do you sort through all of these applicants?  Your best bet is to implement some sort of automated screening methodology.  It could be as simple as a checklist of knowledge, skills and abilities that the person needs to have or a validated test that differentiates between strong and weak applicants.  Regardless, the best move is to begin thinking now about automating that screening process.  Chances are, your pre-October, 2008 selection ratio for a given job was a lot larger than it is today.  And, more importantly, that ratio is going to get smaller until the floodgates open and the market swings back in the other direction. 

Bottom-line:
(1) If you can afford it, consider filling some of those highly skilled positions sooner rather than later—before everybody else starts calling them.
(2) If you can’t afford to start hiring now, get a head start by putting a screening process into place, and really begin thinking about how to take advantage of this buyer’s market.

About Dr. Gary Kustis

Dr. Gary Kustis works for The Aldridge Group, a management consulting firm specializing in the selection and development of employees.  He has worked with a variety of companies in their efforts to build legally defensible selection systems that add value to the bottom-line.  Gary has a Master’s in Industrial Psychology and a Ph.D. in Business.

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