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Hiring new grads in a tight labour market

01 Jul 08

Unemployment levels in New Zealand are at a historic low, with the shortage of skilled workers in the ICT industry particularly acute.  With ICT organisations finding it difficult to find, attract and secure talent, the country faces the possibility of a retardation of economic growth. 
Labour market reports show that New Zealand’s unemployment rate is expected to rise marginally over the next two years due to modest employment growth; however, the unemployment rate is still expected to remain low on a historical basis at below 4%.  While the supply of labour has been growing, it has been unable to keep pace with the increased demand for workers.
The Quarterly Survey of Business Opinion (QSBO) conducted by the New Zealand Institute of Economic Research (NZIER), from the December 2007 quarter, revealed the following skills shortage indicators:

  •     A net 46% of firms had difficulty finding skilled staff.  This has risen from a net 41% in the September 2007 quarter and is up strongly from a net 29% recorded a year ago.

  •     A net 33% of firms had difficulty finding unskilled labour, up strongly from a net 19% in the September 2007 quarter.  This is the highest it has been since its peak of a net 49% in early 2005.

  •     A shortage of labour was the main constraint on expansion for 21% of firms at December 2007.  This figure has remained around 20% for the past five quarters.

In the Department of Labour’s “Survey of IT Recruiters 2008”, it found that currently the occupations hardest to fill, in order of difficulty, are: ICT security specialist, telecommunications network planner, telecommunications technical officer or technologist, ICT systems test engineer, ICT support and test engineer, telecommunications network engineer, telecommunications engineer, ICT quality assurance engineer, software engineer, and software and applications programmer.
If you’re noticing the squeeze, or finding it takes a long time to find quality ICT staff, you simply have to get creative.  New ICT, Engineering and Computer Science graduates may not be highly skilled, but they have shown a dedicated interest in the industry.  How can you find the best new grad talent and build them up to be successful, skilled contributors to your business?  The process requires commitment, but in the current employment market, it is a ‘must do’.
How can you retain graduates after they’ve been up-skilled at your expense? Invest in graduate programs, recommends Phillippa Tait, former Recruitment Consultant for Vision Recruit.  “The grads who make it through are really worth their weight in gold.”
While there is a general resistance to using recruitment agents to hire new graduates, if you can afford the extra expense, it may be worth it.  Many of the qualities you should be looking for are hard to quantify.  “It’s a huge amount of work,” said Tait.  “On paper, they all look the same.  To find the cream of the crop takes significant effort.”
A colleague of Tait’s, Recruitment Consultant Jo Clegg, recommends that if you’re going to do the hiring on your own, be flexible and, above all, look for a good cultural fit.  “Be forgiving of Cs.  Most new graduates are young.  Most importantly, look for evidence of goals, and look at what they’ve done while at school – community programs, sports, awards.  Personally, I look for commitment.  If they haven’t held a part-time job while they’ve been at university, they automatically go into the ‘no’ pile.”
Robert Amor, Head of Department (Computer Science) at the University of Auckland, has noticed a far greater effort on behalf of ICT industry employers to engage university students and new graduates.  “Virtually all of our students are being grabbed by the industry,” he said.  “They see little reason to stay on for post graduate work.  The visibility and attractiveness of the workforce is working now in a way we didn’t see five years ago.”
The skills shortage is affecting tertiary education, not just the employment market.  Where five years ago, the University of Auckland used PhD students, exclusively, as tutors, they now use Masters students and are this year even talking to some exceptional third-year students.  With more employers willing to swipe up young, new graduates, there is far less incentive to commit to post graduate study.
Knowing that they’re almost guaranteed to find a job straight out of university gives many new grads unrealistic expectations.  “They [new grads] often think they’re indispensible,” said Tait.  “It’s often ‘I want’ instead of ‘will I be given?’.” 
You must strike a fine balance between offering an attractive package for the new grad and creating a fit that works for your business long-term.  Giving new grad hires a chance to explore different areas of your business allows you the opportunity to capitalise on their strengths and keep them interested, as well as give them direction they often don’t have on their own.
“Most don’t know exactly what they want to do,” said Amor.  “I’m continually surprised at how naive they are about the jobs they’ll have to do as new grads.”
Lauren Friese is founder of in Canada.  In her blog, “How to Hire a New-Grad: Lessons from a Gen-Y perspective”, she recommends “recruiting outside the lines”.  Look at degree titles and grades as secondary to the core skills attained during the tertiary education process.  Look beyond direct work experience into life experience.
The HR department at Alcatel-Lucent follows a similar strategy and recommends looking for creative thinkers with strong communication and interpersonal skills and leadership potential.
“Without a crystal ball, we cannot be sure of future leadership potential; however, the factors of well-developed communication skills, a strong work ethic, passion for the industry, and a demonstrated personal drive to succeed are good indicators of future success,” said Mark Buckley, General Manager, Enterprise Business Group Australasia, for Alcatel-Lucent.  “Look for attributes and core behavioural skills that indicate leadership potential and are demonstrated at an early stage of an individual’s career – communication, teamwork, emotional intelligence, adaptability – demonstrated during the student’s university career, such as participation in organised university groups, volunteer work and part-time employment.” 
Jo Allison, Head of Marketing, Capability and Channels for Gen-i’s leadership team, recommends looking for graduates who are “after a challenge”.  “Seek out candidates with a drive to achieve, who are comfortable with variety.”
Once you’ve found a candidate who shows potential, make sure you can offer what they want and need, and it’s not all about money.  Further education and training are huge incentives, as are personal and professional development schemes.  Ask where the graduate wants to be in five years and show a genuine interest in helping him or her get there.  Knowing that you are invested in their long-term development and job satisfaction will go a long way to keeping them around as a valuable member of your team. 
“We can’t assume that we can pick and choose,” said Allison.  “We’re keenly aware of the tight labour market.  People have to choose to work for us.”
Gen-Y graduates can be quite vocal about their expectations when given the opportunity.  Be honest from the start about what you can provide as an employer and be open to what they can offer, even if some of it is a bit non-traditional.  

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