Harnessing the power of ‘Talent Centric’ economy

Aon Hewitt StudyDecoding Hiring Trends in India 2016

Solicitation Partner

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Table of Contents

Foreword

About the Study

Executive Summary

The Big Picture

Looking Ahead

Hiring Practices

Hiring Metrics

Annexure

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04

05

13

19

24

30

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Nitin is a Partner and Aon Hewitt’s Chief Commercial Officer for India.

He has extensive advisory experience with clients across the globe in the areas of HR Strategy, Performance & Rewards, Leadership Development and M&A.

In addition to working with clients, Nitin also leads the innovation and New Business Incubation agenda for the firm in India.

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Nitin SethiPartner and CCOAon Hewitt | India

Foreword

Favorable prognosis of the Indian economy, supporting government initiatives and sustained focus on innovation have fuelled sustained growth for India Inc. Aligned with the national sentiment, 79% organizations project increased hiring in the year 2016-17. As fundamentals of the economy further improve, India Inc. will see further increase in talent demand across sectors. HR and TA teams will come under significant pressure to attract and retain the best talent that business needs to drive organizational performance.  

Talent acquisition roles are fast changing. TA professionals now need to don the hat of strategic business partners and align organization’s priorities to their recruitment strategies. In the last years study, we spoke of competencies that will drive a successful TA professional of the future. Positioning the employer brand, candidate experience and RoI on selected candidates are some of the some new measures that TA teams will now be judged by.

In the world of digitization, employers are leaning towards smarter and more innovative means of attracting key talent. Social media and technology innovation are being leveraged ferociously to enable the last mile candidate reach as well as deliver robust hiring solutions. Employers are refining the mix of sourcing channels and implementing a variety of assessment tools for talent selection. Unlike in the past, professional networks have made sourcing easy at the click of a button, giving employers the freedom to create a talent pipeline without heavy reliance on external factors. The use of talent analytics has created quite a stir in the marketplace, albeit, the reality is that most organizations fall well short of mastering capabilities to use these tools, thus effecting cost-per-hire – an ongoing priority for HR.

The 2016 study brings deeper insights on what drives key decisions and talent acquisition imperatives. This report draws characteristics that are shaping up the hiring space in India Inc. This study highlights trends that will be most relevant as organizations evolve and what this means for – businesses, workforce and the HR alike.

My sincere thanks to the participants who shared their knowledge and insights with us. Their thoughtful and candid inputs have made the second edition of the Decoding Hiring Trends in India Study truly valuable and one which I hope becomes a part of the strategic toolkit of HR leaders.

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Foreword

Ester MartinezCEO and Editor-in-ChiefPeople Matters

Ester, an HR professional turned entrepreneur and alumnus from ISB, founded People Matters in 2009

Ester has more than 14 years of experience in HR, with a wealth of knowledge in areas of talent and human resources management. Unt i l 2008, she worked as a professional manager with a host of blue chip companies in different countries within Europe, UK and India.

After the astounding success of its first edition, Decoding Hiring Trends in India 2015 Study which captured distinctive insights and created a unique position in the market; this year the research focuses on the insights and trends on talent acquisition on four different parameters – Hiring Drivers, Hiring Outlook, Hiring Practices, and Hiring Metrics.

Many factors play a role in the hiring ecosystem, both macro and micro. This study makes an attempt to understand the nuances of a majority of these contributing factors. It is interesting to note that employer branding, a very important factor, is yet to become an area of focus among a majority of organizations. The study also emphasizes on an important trend, the emergence of video interviews, which have begun to replace the more traditional in-person processes.

Social Media hiring also finds more takers and has become the driving force in the hiring process, an important trend that is clear from the study. Since both efficiency and effectiveness continue to be critical, cost-per-hire remains a top priority as revealed by the study. Optimizing cost-per-hire has emerged as one of the top trends and the top priority for recruitment and business alike. The recruitment leaders have also put an emphasis on feedback mechanism as a part of candidate experience. To add value to the study and include a practical perspective, this year’s research also includes short case studies from leading organizations in the major areas covered in the study.

Overall, the Aon Hewitt in partnership with People Matters Decoding Hiring Trends in India 2016 study will provide you with valuable insights that can help you shape the recruitment strategy for the coming year for your organization. As always, we would also love to hear from you regarding the study and its findings. Do write back to us at the contact details provided at the end of the report.

Aon Hewitt surveyed 160 organizations covering more than 12 industries to understand talent acquisition priorities and best practices as a part of this research.

Aon Hewitt in partnership with People Matters conducted the second annual ‘Decoding Hiring Trends in India 2016 Study’.

The study provides comprehensive inputs on the following four parameters:

• Hiring Drivers: Talent acquisition priorities, challenges and competitive threats

• Hiring Outlook: Forecast of employment outlook and budget allocation in 2016

• Hiring Practices: Best practices in attracting, sourcing, assessing, and selecting talent

• Hiring Metrics: Critical hiring metrics tracked as per prevalence, and industry benchmarks

Learn how the hiring space is undergoing evolution across different sources of hiring, changing priorities and adopting techniques of digital economy to attract key talent in 2016 and beyond.

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About the Study Participant Profile

160 Companies 12+ Industries

46% Indian54% MNCs

Executive Summary

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�e Big Picture: Employer branding and talent engagement keep recruiters up at night!

Leveraging proactive strategies to engage with talent consistently keeps recruiters awake at night

The next big shift in recruitment is the ability to maintain consistent engagement and relationship with candidates, rather than sourcing candidates based on requisitions.

48% of organizations report that ‘Engagement with passive talent’ when done well by competitor is a top threat to attract talent. Further, 45% of organizations report that if their competitor were to communicate their employer brand effectively, then it will be a competitive threat.

With 64% of organizations reeling under the pressure of losing talent to ‘Competition’, having a well defined and consistently communicated employer brand is a clear competitive advantage. The Next Generation recruiter thwarts competition by nurturing a strong pool of candidates.

Shift from process to people based recruitment prioritiesCompanies increasingly identify two key areas of focus – recruitment priorities that are all about having a well formed strategy to attract active and passive talent, and relentless focus on communicating a distinguished employer brand.

Leveraging social networks for sourcing active and passive talent (43%) and communicating the employer brand effectively (29%) emerge as top 2 recruitment priorities. Being a trusted talent advisor to business (28%) closely follows in the list of top recruitment priorities for the year.

Recruitment in today’s digitally connected economy is maturing, with employer brand strategy changing talent sourcing from push to pull based methods.

Candidate Engagement: The Winning Strategy

Talent acquisition leaders for tomorrow will be brand evangelists, mastering the art and science of candidate engagement and relationship management. Organization perception metrics will soon be key effectiveness metrics for hiring teams.

79% of organizations report ‘Increase in hiring’ over the last year, with two-thirds of the hiring being done at junior and entry levels.

67% of organizations also plan to ‘Increase the recruitment budget’ over last year. However, 12% of companies do not plan to increase recruitment budget from the coming year, hence talent acquisition teams are expected to deliver more with a similar amount of money as previous year.

Further, only 21% of companies report wallet share increase for ‘recruitment team cost’, thereby adding to margin pressures. With evolving recruitment practices, organizations are clearly betting on components that drive recruitment efficiencies rather than increase headcount to deliver on business needs.

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Looking Ahead: Budget allocation aligned to drive efficiency to meet increased hiring demand

Recruitment budgets increase in close proportion with hiring intake

Efficiency components witness increased wallet share, employees are the new brand ambassadors

HR Technology/Platforms witness maximum wallet share, as 42% of organizations report an increase for this component. A close second is witnessed for ‘branding and marketing’ as 39% of organizations will increase wallet share in this category, aligned with the recruitment priority to communicate the brand effectively. Investments in social media (37%) and talent assessments (34%) follow closely.

Referrals emerge as a preferred sourcing channel, as 33% of companies plan to increase spend in this area. Organizations are ‘turning in’ with referrals and employees becoming the new brand ambassadors. This helps decrease external dependencies for sourcing and helps leverage the employer brand through employees themselves.

Branding: Recruiter’s Mindset, not an Activity

Rising margin pressures and branding woes will give rise to alternative methods such as social sourcing and referrals. Components that amplify the employer brand will witness increased investments.

With a stated priority to deliver on ‘Quality of Hire’ and advent of dynamic talent assessments, hiring manager capability to sift the best from the rest is a key enabler. It has become so important that hiring managers are equipped to select talent that is the best fit; looking beyond skill and knowledge fitment.

Aligned with this, 50% of organizations invest in building the interviewing capabilities of hiring managers. Further, organizations are going the last mile with 54% seeking hiring manager feedback on the hiring process and effectiveness.

Recruitment function' partnership with business becomes holistic with capability building for hiring managers and integration of data in the hiring cycle to drive talent decisions.

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Enabling the business and hiring manager is more critical than ever before

New age recruiter is data and technology savvy

Recruitment as Trusted Talent Advisor

With the advent of behavioral and culture fitment assessments, hiring manager capability and integration of talent analytics into decision making will become the litmus test for an effective recruitment team partnership with business.

As digital connectedness matures, recruitment teams build in-house capability to drive data based hiring and aid decision making. With a stated priority to drive technology based recruitment processes, 50% of organizations have digitized at least one process of the entire recruitment cycle. A further 30% are planning to digitize the entire recruitment cycle by the end of 2016.

65% of companies have dedicated team members for talent assessments, data analytics and technology.

As hiring numbers increase and the millennial population increasingly enters workforce, organizations have to take the final leap with mobile platforms and immersive candidate experience to stay relevant and deliver on the employer brand.

Hiring Practices: Consolidation of practices and internal capability building

55% of organizations track ‘Time to fill’, to measure hiring effectiveness, followed by ‘Cost per Hire’, which is tracked by 44% of organizations. ‘Time to Offer’ is a close third as 37% organizations track this metric.

Though heavily tracked, ‘Cost per Hire’ as a metric is broken since the component varies across organizations and industries. Vendor costs (70%), background verification (66%), referral cost (65%) and assessments (50%) account for the Top 4 contributors to the hiring cost across levels.

As organizations look forward to optimize this metric, innovative methods of moving employee referral expense from monetary outcomes to experiences and benefits emerge to offset the pricing.

29% of organizations believe that ‘Quality of Hire’ is the most important metric to track hiring effectiveness over speed and cost of hire. Further, 30% of organizations want to track ‘Quality of Hire’ consistently in the coming year.

However, 90% of these organizations track ‘Quality of Hire’ differently. ‘Early attrition’ (30%) and ‘Manager feedback’ (20%) are the most commonly encountered metric to measure Quality of Hire.

As organizations strive to make hiring efficient and effective, ‘Quality of Hire’ will increasingly become the most important metric – effectively the magic metric that will define the health of talent pool. Hiring manager effectiveness in identifying the best talent will be a key determiner in optimizing this metric.

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Hiring Metrics: Cost and Speed of hire remain critical, Quality of Hire on the rise

Cost and speed of hiring are the most prevalent hiring metrics

Rise of Quality of Hire: The ultimate effectiveness metric

Quality of Hire: Rise of Effectiveness Metric

Consistent parameters that relate to high potential, cultural fitment and retention will be integral elements when qualifying this metric.

Hiring practices that will optimize outcomes on these parameters will witness increased investment in the coming years.

Organizations want to adopt targeted strategies to engage with ‘passive talent’ as 45% employers report that the lack of this is a competitive threat.

Sourcing moves from requisition filling to maintaining an ongoing relationship and recall with key talent.

Recruitment teams partner with business end to end: as the trusted talent advisor, build hiring manager capability and enable data based decision making.

50% employers today actively build hiring manager interview capability to ensure recruitment is effective.

Speed of hiring and cost remain critical however organizations increasingly consider ‘Quality of Hire’ as the most critical effectiveness metric.

‘Early Attrition’ is the most encountered measure for Quality of Hire, tracked by 30% employers across

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Recruitment Trends: What changes!

Passive Talent Engagement

Recruiters as Strategic Talent Advisors

Rise of ‘Quality of Hire’

In l ine with the positive hir ing sentiment, 67% organizations are increasing their recruiting budgets over last year.

Components that improve candidate experience and enable efficiency (technology, branding, referrals, assessments) have higher wallet share.

Employees are the new talent scouts, as organizations are increasing wallet share for recruitment through employee referrals (35%).

Touted as the preferred sourcing c h a n n e l , e m p l o y e e r e f e r r a l s increasingly play the dual role in sourcing and brand building.

With less than 20% of organizations reporting mobile enablement of recruitment processes, employers are inadequately positioned for the mobile wave.

To optimize ‘Offer to Join’ ratios, last mile solutions at the ‘Post offer stages’ remain a key opportunity area

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Recruitment Trends: What changes!

Wallet Share: Evolving Apportionment

Referrals: Advent of The Dual Model

Mobile Enablement

With the naked feedback economy, employers struggle to differentiate themselves from the competition.

39% of organizations plan to increase wallet share for branding and marketing this year.

Pre hiring assessments remain more important than ever before. 65% of organizations have dedicated capability for assessments, technology and data analytics.

However, leveraging big data for effective hiring decisions is still at a nascent stage.

50% of organizations use social network for sourcing talent at mid and senior levels.

Organizations consistently leverage social networks to source as well as engage with passive talent.

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Recruitment Trends: What sustains!

Employer brand: The Winner

Talent Analytics and Assessments

Duality of Social Media

�e Big PictureTalent acquisition priorities, challenges and threats

To have a “seat at the table”, the holy grail is to link role understanding with talent dynamics; and align talent acquisition strategies with business goals

With 4 out of every 10 organization reporting use of social media, professional network usage emerges as the sourcing tool of choice

Every 3 out of 10 organizations report focus on ‘employer brand’ to attract fresh talent and at the same time deliver brand aligned experience for existing employees

2016 Priorities of Talent Acquisition Trends Scanner

Top Priorities for Talent Acquisition

Professional Networks for Sourcing

Managing Brand and People

TA as Trusted Advisors

Shifting priorities of talent acquisition teams

Sourcing through social media and leveraging the power of employer brand have emerged as top priorities coupled with being trusted advisors to business.

26%organizations

want to consistently

measure ‘Quality of Hire’

16% prioritize scientific

assessments: clearly far from being the norm

20% organizations have

stated priority to source and engage with passive talent

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Challenges to Attract Talent Trends Scanner

Challenges Impacting Organization’s Ability to Attract Talent

Organizations continue to report losing talent to the competition as a primary challenge; thereby catapulting the relevance of a well articulated and implemented ‘Employer Brand’ that will act as a differentiator and not just a branding tool

Talent Drain

Despite the plaudits, changing the entrepreneurial mindset of talent in India, pose an indirect threat in the form of “idea replication”

Embedding an Entrepreneurial Mindset

With 10.3x salary increase projection, organizations need to effectively position ‘Employer Brand’ with a compelling message around total rewards programs to differentiate from competition

Rethinking Total Rewards

Building a game-changing talent strategy

The war for talent, skill shortage and a bleeding pipeline have made it absolutely necessary for companies to relentlessly drive a well articulated hiring message and differentiate from competition

64% organizations are clearly plagued with growing

skills shortages

10.3% projected pay

increase in India; the 4th highest

salary increase in the world

37% impending workforce shortage

Use of big data to hire the right talent and optimize ‘Quality of Hire’ is a potential threat from competitors if done well, and is an emerging challenge area for companies

4 out of 10 organizations feel that having a ‘pull based’ talent strategy is the need of the hour especially when the focus on speed of hire is strong as ever

Losing talent to organizations that are actively prioritizing a strategic partnership with business is an emerging threat: An action area for recruitment teams that already have this as a stated priority.

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�reat from Competitors Trends Scanner

Recruitment Practices that when done well are competitive threats

Predictive Hiring

‘Just in Time’Talent Pool

Business Partnership

Candidate centric hiring practices are competitive threats

Sourcing and engaging proactively with active and passive talent emerges as top competitive threats. These will be touted as emerging best practices in recruitment.

48% organizations view a well articulated and

communicated employer brand as a potential threat

45% organizations are

anxious about competition

engaging with passive talent

27% say leverage of

social media; if done well (for sourcing

and branding both), is a threat

Organizations are luring talent by appealing to talented aspiring entrepreneurs, especially when millennials are likely to drive and impact organizational growth in future

Organizations are moving away from traditional engagement approaches and focusing on employee well being; at the same time the focus on ‘Corporate Social Responsibility’ as an integral

With skills shortage emerging as a key challenge, organizations are building a strong promise around learning and development initiatives to both potential and existing employees

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Employer BrandTrends Scanner

What Organizations Seek to Offer to �eir Employees

Learning and Careers

Entrepreneurs Beehive

Socially Responsible Workforce

Employer Brand, a key component for galvanizing talent

Organizations are investing in building and communicating a brand that is aligned with changing talent aspirations of

15% increase over last year in ‘Learning and Careers’ as

the stated employer brand

18% organizations offer

‘Well-being’ to deliver on a holistic

workplace as the employer brand

24% organizations

promise ‘Inspirational

Leadership’ as the significant employer

proposition

– ‘Best Social hiring and Best Employer B r a n d i n g ’ i n t h e P e o p l e M a t t e r s TA League Awards 2015

– ‘Brand Development’ at the Asia Recruitment Awards 2016

– InMobians became talent scouts, referred the finest talent, helping recruitment team close open positions at lesser turnaround time and improved quality of hire

– Referrals rose by over 100%

– Recruitment costs reduced by 95%

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Success Story Effectively Harness Social Media and Enhance Organization’s Brand in Job Market

About the OrganizationInMobi, a mobile advertising and discovery platform, enables over 100 billion discovery sessions on mobile across a billion users every month, becoming the largest discovery platform in the world

ObjectiveThe objective was to effectively harness social media and create a sustainable model to enhance the organization’s brand in the job market

Approach Retract from any engagements with recruiting agencies

Leveraged employees on social media to become the organization’s

ambassadors

Started drawing in more referrals, moved from cash to experience based

referral rewards

Long term approach to employer branding that would let people take

pride in working at InMobi

– Created a well-defined culture with a name – YaWiO.

– Invested in people development

– Encouraged people to pursue careers of choice internally

– People caring policies

– Talent branding Initiatives (startup.inmobi.com, Facebook and Twitter

career handles)

Improvements in attrition and referral rates

Increased followership on social media

Branding programs evoked positive response from its employees

Recognition at leading HR awards

‘‘Our culture is our brand. InMobians take pride in speaking positively about our culture and sharing it with

the world everyday”

- Kevin FreitasInMobi, HR Leader

Results:

Looking AheadForecast of employment and budget allocation for 2016

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Hiring Outlook 2016Trends Scanner

In line with stabilizing macro-economic conditions, the overall hiring outlook of India Inc. shows positive sentiment

Given the aggressive hiring strategy of organizations in the coming year, 7 out of every 10 organizations have increased their recruitment budget.

20% hiring at mid and senior levels will be for backfilling positions. Two thirds of hiring will be done at junior levels; aligned with rising job creation across industries.

79% organizations

showing increasedhiring projection for

2016

+7% increase in the overall hiring outlook from

last year

67% organizations

increasing budgets for recruitment

Robust Hiring

IncreasedWallet Share

Hiring Health

Forecast for Hiring 2016 Recruitment Budget for 2016

Contrary to the global economic weakening, India Inc. shows spurt of positive hiring sentiment. Recruitment budgets also align with hiring numbers

Positive hiring outlook

Even with ‘Make in India’ in action, the hiring outlook for the engineering / manufacturing industry is not as high as expected; lower than India Inc.

With pharma sector expected to reach USD 14 billion by 2020, the hiring forecast for 2016 too shows upswing

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Hiring Outlook 2016Trends Scanner

Industry v/s India Inc. Hiring Forecast – Hiring Projections for 2016

Movers and Shakers in the hiring industryMaximum increase reported in Pharma and Healthcare and lowest increase for Engineering/Manufacturing vis-à-vis India Inc.

Pharma on Rise

Engineering / ManufacturingDip

relative decrease in hiring outlook for

Engineering/manufacturing

vis-à-visIndia Inc.

14%

relative increase in hiring outlook for

IT/ITeS vis-à-visIndia Inc.

relative increase in hiring outlook for Pharma vis-à-vis

India Inc.

9%

7%

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Increase in Budget Allocation for Hiring Components

Top 4 areas that will see increase in wallet share across most companies remain the same as last year: Technology, Social media, Branding and Assessments

UndeviatingFocus

Employee Referrals on Rise

With the increase in wallet share for ‘Employee referral cost’; companies clearly want to align their sourcing practices with their hiring priorities. Referrals weren’t amongst top priorities until last year.

Optimise Cost

Cash outflow components witness reduction in spending viz travelling, verification and vendor.

39% organizations

want to increase spend in

social media

13%employers will

increase spend in RPO cost

Budget allocation increaseTrends Scanner

Poised for growth on an upward swing the recruitment budgets percolates to increased budget share across components that enable outreach and quality

Managing an organization's largest cost

21%employers will

increase spend in recruitment team

cost: low prevalence

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Success StoryHiring Stakeholder Engagement Program using Technology and Talent Analytics

About the OrganizationSapient, a global marketing and consulting company providing business, marketing, and technology services to clients

ObjectiveSapient faced the burst in business demand, increased hiring numbers, unhappy clients (project delivery leads) due to inability to fill the needs at the pace required by the business and potential revenue loss

ApproachSapient leveraged technology and talent analytics to foster collaboration with hiring managers Helped business understands the need for technology and increased budget

using hiring analytics Leveraged hiring and collaboration tools like Catalyst, Box, Vox Use differentiated rewards and internal recognition for contributing

interviewers Interviewer skills using the STAR interviewer approach and psychometric

assessment to bring in consistency in recruiting outcomes Enable stakeholder partnership and capability building to reduce interviewer

time

Results:

Reduced time to fill open positions by ~15% 40% reduction in time to deploy new hires in

project teams Increase ability to recruit Quarter over Quarter

by over 15% 50% increase in interviewers participation

enabled due to transparency brought in by the data based reporting

Utilization of interviewer pool increased from 50% - 75%

‘‘‘‘‘‘

The analytics tool has enabled me to have a dialogue with other interviewers from my project and ensuring their availability to support the growing hiring demands

- Sachin MengiSapient, Director (Tech)

Hiring PracticesBest Practices in Structuring, Sourcing, Assessing, and Selecting Talent

Structuring hiring teams by business units remains to be the norm across organizations, thereby reiterating the need of a strategic partnership between TA teams and business

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Team Structure Trends Scanner

TA Team Structure Dedicated Team (By Business only)

84%organizations have dedicated teams for onboarding and feedback management

With everything remaining constant, recruiters are increasingly building in house capability with teams that is best friend with data and technology

Rise of the data masters in the TA teams

70%organizations

structure TA team by Business

90% organizations

outsource ‘Background

verification’ as a process

End-to-end Hiring Needs of Business

Tech EnabledHiring Team

Dedicated Focus on Campus Hiring

Increasingly, organizations have dedicated teams that drive the technology and data based hiring agenda for the firm: Assessment, technology and talent analytics teams

Focus on campus recruitments has risen with dedicated teams working towards sourcing and managing candidates who join the firm from campus

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Sourcing Channel MixTrends Scanner

Sourcing Channel Mix by Levels

As companies experiment with sourcing channels and newer sources become the norm, soon companies that track ROI by sourcing channels will be at the driver’s seat

Shifting paradigms for sourcing: Who is talking ROI on sourcing?

64%organizations use employee referrals

at mid level as a dominant sourcing

channel

67%organizations use direct sourcing at

senior level: Dominant sourcing

channel

56%organizations use campus hiring for

junior level recruitment

Employee referrals emerge as a key sourcing channel at junior and mid levels as a disproportionate number of organizations leverage this medium

Employee Referrals

Sourcing is witnessing a paradigm shift from traditional channels of corporate websites to newer means of social networks and referrals

Transforming Recruitment

Vendor Based Sourcing

Relying on recruitment firms for talent remains to be a key sourcing channel for mid and senior levels. While social media usage has increased for sourcing, there is still a gap to beat recruitment partners for mid and senior levels.

Organizations deploy a mix of selection tools, viz functional interviews in conjunction with psychometric and aptitude assessments to enable a robust hiring process across levels

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Prevalence of Hiring ToolsTrends Scanner

Sourcing Channel Prevalence by Levels

Increasingly, organizations are focusing on candidate's behavioral and cultural fitment, especially for hiring at mid and senior levels

53%organizations

screen potential hires for culture fit across levels

24% organizations do

not use functional interviews at any

level for hiring

35%group discussions are prevalent as

pre hiring assessments across

levels

Given the impact of hiring decisions, organizations are choosing a mix of knowledge, skills and fitment based selection tools. However, what remains to be seen is how these drives the objective of improved ‘Quality of Hire’.

Recruiting for cultural fit

Mix of Tools for Successful Hiring

Determining Role and Culture Fitment

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Digitization of Hiring Tools and ActivitiesTrends Scanner

Mobile Enabled Recruitment Practices for Candidates

Professional networks enable recruiters to evaluate credentials at touch of a button; innovative methods like video interviewing have begun to replace more traditional, in-person procedures

Digital Waves in Recruitment

1 BnIndia Crossed

Mobile Subscribers Milestone

3%organizations

have the entire recruitment cycle

digitized

15%organizations have mobile

enabled assessments

Recruitment landscape is evolving at rapid space, having platforms that enable and empower candidates to interact with the company on-demand is critical for a lasting impact

Catching the mobile wave is critical for candidate experience

Talent in Digital World

While the digital world is fueling hiring space, interviews, application process and other activities still take place in the traditional, physical world

ScalableAssessments

As organizations look to increase hiring across levels and with a focus on junior and entry levels; managing scale while optimizing cost and quality remains a key focus. With less than 15% companies reporting tech enabled selection assessments, the evolution is a long distance

TA experts are increasingly investing in building interviewing skills of hiring managers to drive consistency in the process and enable better talent selection to deliver on the agenda of ‘Quality of Hire’

Nearly, 50% organizations reach out to candidates as well as hiring managers for feedback on the recruitment process indicating the rise of a feedback driven economy

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56%TA experts seek feedback from

hiring managers

30%organizations are looking at using tech - enabled

recruitment tools

54%organization

invest in manager’s

interviewing skills

Feedback Driven Economy

Managerial Capability Building

Recruitment Best PracticesTrends Scanner

Best Practices used During Recruitment Best Practices Quotient

Companies are increasingly tracking feedback from key stakeholders – business and candidates alike to manage the feedback loop, take corrective measures

Advent of the feedback economy

Hiring MetricsCritical Metrics Tracked as per Prevalence, and Industry Benchmarks

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Early turnover can drastically affect an organization's bottom line. 3 out of every 10 organizations are establishing measures to track early attrition.

Prevalence of measuring quality of hire via feedback from managers, employee engagement scores of new joiners, performance rating and competency assessment is on the rise

Track ‘time to offer’ across

levels

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In the tight labor market, organizations are using efficiency metrics (time to hire and time to offer) as most prevalent efficiency metrics to measure hiring team effectiveness

Metrics to Track Recruiting Team’s EffectivenessTrends Scanner A company is only as good as its talent, so having

a recruitment team who can master this balance is fundamental for success. Measuring it’s effectiveness is critical in order to assess and improve the recruitment process.

Evaluating recruitment efforts

Track time to fill: most prevalent

metric

track candidate satisfaction score

Metrics to Track Recruiting Team’s Effectiveness

Prolonged Time of Hire

Hard to Retain Talent

Measuring Quality of Hire

55%

37%

14%

There is a constant struggle to maintain a healthy balance of dependence on external and internal agents for sourcing. Vendors and referrals have similar prevalence as a key component of Cost per Hire by levels.

Low prevalence of branding on ‘Cost per Hire’ is indicative of recruitment practices where the wallet share is for platforms that enable branding as an outcome: moving away from traditional means of a dedicated cost component for branding

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Prevalence of Cost per Hire componentsTrends Scanner

Prevalence of Cost per Hire components

Vendor BackgroundVerification

Employeereferral cost

Recruitmentteam cost

Talentassessment/

selection tools

HRTechnology/

Platforms

Branding &Marketing

RPO

Branding and Marketing

External v/s Internal Sourcing Channels

The variegated yardstick for Cost per HireWhile organizations continue to optimize ‘Cost per hire’, there is increasing need to arrive at a singular stack up for components of this metric.

organizations report ‘Vendor’ as a key component in ‘Cost per Hire’

70%

organizations report ‘Branding and Marketing’ as a key component

in ‘Cost per Hire’

28%

organizations report ‘Referral cost’ as a key component in 'Cost per Hire'

55%

Organizations are considering multiple metrics that could be usefully applied to help create a fuller picture of an individual’s performance at work

Organizations are increasingly measuring engagement scores for new joiners to track the quality of hire and understand the impact of the company on the individual’s engagement and vice-verse

organizations track manager

feedback for early joiners to

measure ‘Quality of Hire’

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Decoding Quality of HireTrends Scanner

Components of Quality of Hire

Manager Feedback on new joiners

Performance Rating

Engagement score for new joiners

Early Attnition

Competency Assessments

Inputs from hiring manager remains to be a critical metric to track and define quality of hire in organizations across industries

Feedback Loop

Mix of Performance Measures

Engagement as a Lag Indicator

Quality of hire positively impacts business Measuring the quality of hire is the most strategic action organization can take in to understand the effectiveness of its recruitment process and its impact one’s business

20%

organizations track early

attrition: most prevalent metric

for ‘Quality of Hire’

30%

track performance rating of new

joiners for ‘Quality of Hire’

18%

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Average Time to Fill an Open Position

Recruitment Period Trends Scanner

Offer to Join

Average Time to Offer

Average Retention Duration

15 days 45 days 1 Month 2 Months 3 Months More than 3 Months

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%

Junior Level Mid Level Senior Level

Junior Level Mid Level Senior Level

Junior Level Mid Level Senior Level

Junior Level Mid Level Senior Level

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%

‘‘‘‘

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Success StoryRecruitment Reengineering: Interest Based Candidates and Hiring

About the OrganizationCapitalVia is a renowned financial market research and consulting organization. It is a pure play research firm which provides live trading recommendations in Equities, Commodities & Forex markets based on high quality technical research to its clients

ObjectiveThe opportunity costs from a vacant position was going up and the vacancies at middle management had a cascading impact throughout the organization. Also, being based out of Indore, a tier II city, CapitalVia were facing difficulty in attracting top talent.The objective was to hire interest based candidates and reduce two crucial costs: recruitment and hiring costs, and opportunity cost of vacant position because of attrition.

Approach CapitalVia identified the existing employees to be the best people to resolve

this problem through their social media presence They analyzed tools like Glassdoor, LinkedIn and other social handles and

encouraged employees to share their testimonial, reviews and openings through their social media handles which attracted their peers to apply

The approach was based on the principle that employee referrals are very cost effective as well as sustaining

The model was tested as a pilot run and delivered 360 degree ROI The basic of model remained the same i.e., ‘Recognition: Refer and Reward’,

for effective pull hiring

Results:

10% reduction in cost per recruitment 20% reduction in TAT of Vacancy to

Onboarding Cycle A significant drop of 3 percentage points in

the attrition rate in a quarter thereby reducing opportunity cost of vacant position

Increased monthly revenue by 40% and improved client retention

Interest based hiring

executed by our own

and existing employees

have significantly

reduced cost of hiring, TAT and attrition

- Gaurav Garg

CapitalVia, Head - HCM

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Annexure

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Glossary

• Top Executive/Senior Management: Senior management plays a key role in both short-term and long-term decision-making of a major functional area or business unit, direct, or coordinate activities within two or more major departments, establish policy and have a major impact on the achievement of the business unit or function goal

• Middle Management: Middle management is experienced managers, who manage the activities of one major department and set up standard procedure and policy or lead projects or programs which have broad effect on overall policy and achievement of organization-wide objectives

• Junior Level: Provide day-to-day management of a team, has knowledge of a specialized field of technical or administrative function and resolve problems of some difficulty, could be supervising a team or individual contributor or be an entry level professional

Employee Groups Hiring Metrics• Cost per Hire: The total cost incurred to hire an employee in the

organization. The cost is inclusive of the entire hiring cycle starting at talent sourcing to the onboarding of the candidate

• Speed of Hire: The time taken to fill up a position to offer the position to the selected candidate the organization from the day of its vacancy being created

• Quality of Hire: The quality of hiring candidate being measured by scores of competency assessments, manager’s feedback on performance, performance rating of new joinee, engagement scores and early attrition

• Offer to Join Percentage: Number of candidates who join the organization as a percentage of the number of people who are extended an offer for a particular position

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About Selection and Assessment About Aon Hewitt

Aon Hewitt has been a world leader in the design and implementation of reliable and valid assessments for over 30 years. Our global staff of Industrial-Organizational Psychologists partner with clients to implement Selection & Assessment Solutions, covering virtually all industries and job categories.We offer the broadest portfolio of innovative, scientifically proven assessments for talent acquisition and development. Our tests are taken by over 12 million candidates annually across all organizational levels and our solutions range from simple off-the-shelf selection tools through to fully customized assessment frameworks that objectively measure the competencies, skills, abilities and personal characteristics that predict job performance, behavior and retention.

For more information on Selection an Assessment solutions, please visit www.aonhewitt.com/india/selectionandassessment

Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. In India we partner with organizations across industries; multinationals, Indian companies and government bodies. We have strong client impact stories from our work with Family Owned Enterprises in India.

For more information on Aon Hewitt in India, please visit www.aonhewitt.com/india

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About Aon About People Matters

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources.

Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United.

People Matters is a leading knowledge and media platform in the Human Resources space. We strive to create an HR community of practice and excellence that fosters amalgamation of new ideas between HR managers, HR service providers and CXOs, leading to the growth of HR as a business critical function. People Matters’ print, online, digital and events platforms provide thousands of HR stakeholders with information, best practices, trends and industry news. In a short span of 6 years, it has emerged as India’s single point of reference for knowledge in the HR industry. As HR steps up to its new role as business partner and becomes indispensable to business, our vision is to become an indispensable source of knowledge, information and inspiration for the community.

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Contact Us

Research Architects: Research Team: Solicitation Partner:

Nitin Sethi

Partner and CCOAon Hewitt, India

Shivanker Singh

Senior ConsultantSelection and Assessment Aon Hewitt, Indiashivanker.singh@aonhewitt.com

Arpita Chakraborty

ConsultantSelection and AssessmentAon Hewitt, Indiaarpita.chakraborty@aonhewitt.com

Pritish Gandhi

ConsultantAon Hewitt Knowledge CenterAon Hewitt, Indiapritish.gandhi@aonhewitt.com

Pooja Chitkara

Associate ConsultantAon Hewitt Knowledge CenterAon Hewitt, Indiapooja.chitkara@aonhewitt.com

Ester Martinez

CEO and Editor-in-ChiefPeople Matters, India

Nishanth M V

Assistant ManagerMarketing & CommunicationsPeople Matters, Indianishanth@peoplematters.in

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