Does the Talent Shortage Mean the End of Corporate Culture?

As As I read and re-read the results of our recent McQuaig Global Talent Recruitment Survey, new insights and questions keep popping up. This week I was looking at what the responses from 450 HR professionals said about why new hires don’t work out. Some really interesting things came into focus regarding corporate culture and whether or not it matters. I want to share my thoughts and I’d love to hear what you think.

First, here are the numbers: In a weighted average, our survey showed that HR professionals think about 12% of new hires don’t complete their first year with a company. On the extreme end of the scale, 12% of those respondents said that they think that 1/3 or more don’t make it to their first anniversary.

Of course, then you start to wonder why are all these new hires that you worked so hard to recruit, not sticking around?

We asked about that, too. As you can see by the chart the overwhelming majority (58%) said it was because of an “attitude/personality not suited to the role.” The next biggest reason was lack of skills, way down at 22% and it dropped off a cliff after that.

I’m sure you’ve heard a version of the saying “hire for skills and fire for attitude.” I know I’ve heard about a dozen variations of that over the years, and it seems to bear out.

When you look at the results of this question you also see “other” accounting for 10% of responses. I looked into what those other reasons were, and almost half of those were related to a lack of fit with corporate culture.

That jumped out at me because elsewhere in the survey, 65% of respondents told us they have a hard time finding a cultural fit when recruiting. That’s a 14% increase over that same result in 2014. Now we’re getting to a piece that really makes me wonder and worry.

The survey results made it pretty clear that we’re either in, or heading into, a tight talent market. This is backed up by reports from the Conference Board and others. Here’s why I think it’s important to connect these results, and the danger they hint at.

I think – and this is my opinion, so let me know if you disagree – that fit with corporate culture is likely to be thrown over if it comes up against finding the right skills. Despite all the catch phrases and studies that suggest character, cultural fit, and personality are more important than skills because skills can be taught, most HR people I speak to admit that their hiring managers more often pick skills over fit if they can’t get both.

If we’re in a tightening labor market and companies are struggling to hire, corporate culture could end up de-prioritized in the hunt to win the war for talent.

That could be short-sighted, though. Remember that personality/attitude was the run-away leader in terms of the reason new hires don’t work out. Cultural fit ended up accounting for about 5% on write-in responses. Those instances where new hires who fail due to personality conflict or attitude problems may be developing because they were a poor cultural fit.

It will be interesting to watch and see what happens as this talent crunch evolves. What do you think? Will organizations discard cultural fit during the talent shortage? And what does that mean for the future of organizations? Please share your thoughts.

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