Orange County unemployment rate is 2.9 percent as of July, 2022, as such the talent scarcity is creating gaps between the supply and demand of skilled MedTech professionals. Given these challenges we’re all facing we recently asked the online community the following question:
Which part of your business has the hardest time finding and hiring talent?
I suppose EU MDR is to blame for this as the majority of respondents indicated RA QA personnel are the hardest to find.
There’s another distinction worth noting that’s adding fuel to the fire. The cost of living (COLA) in Orange County is 54% higher than the national average. As a result, this has a direct impact on the sheer number of people who can afford to live in OC, which decreases the size of the employment pool. Add into the mix issues the overall State is experiencing like a 250k net migration loss along with relatively new industry regulations like EU MDR and you have a perfect storm where demand is grossly outpacing supply.
Pete Nalbach, GM of SeaSpine in Irvine, CA shared some interesting insights about the present hiring, employment and talent situation:
Pete indicated and I’m paraphrasing a bit “…candidates have options. This means they only accept jobs they really want which in turn gets a higher engaged employee for the company in the long term”
What’s your solution to the talent shortage?
We’ve heard it a thousand times - the labor market is tight and only getting worse. Unemployment for professionals is close to an all-time low while demand continues to skyrocket. Frankly, this is nothing new, nor should this be news to most of us.
What is rather striking are the number of companies who seem to have little plan in place for how they’re going to continue to hire new employees amidst one of the most competitive and challenging employment times in our nations’ history. Where plans lack, so do results. Long gone are the days where we can post a job online and get a slew of great applicants, especially in the technology sector. Why? Because everyone is working, which means those who aren’t, well there might be a reason for that.
What this also tells us is in large part the people we all want to hire are gainfully employed elsewhere, to get their attention to come work for you you’ll need to have a plan in place to do so. Before we can build a hiring plan we first need to understand what we’re up against.
Local Marketplace Dynamics – Orange County, CA:
· Wages in OC are on average 17.3% higher than the national average and 21% higher than neighboring counties
If your organization is hiring now or in the near future, especially for technologists, I strongly recommend you consider the following hiring and company operational best practices as these will set up both your organization to attract and retain the best people.
Remember, the ‘art of hiring’ isn’t a guessing game or round of blindfolded pin the tail on the doneky. People work where they feel appreciated, respected, and compensated appropriately so your organization needs to be able to demonstrate that and then operate accordingly.
Hiring & Company Operations Best Practices:
I’ll admit some of the above items seem a bit over the top yet in the same breath I must also admit many of these things are becoming common place. It’s not to say you need to do them all, but to not offer any of these perks to current and or prospective employees means you may likely find yourself losing current employees to other companies who do have them, or not being able to hire at all. SHRM estimates the cost to backfill an existing employee is 6-9 months of their annualized salary. This offers a good moment of reflection – should you invest upfront (perks) or pay in the rears as you look to backfill and replace employees?
Additional Best Practices:
To attract the best of the best we need to constantly review and optimize our strategies to ensure they are both keeping up with the current marketplace while producing the results we need. Remember, continuing to do the same thing over and over again yet expecting different results isn’t a good recipe for hiring success, it’s corporate insanity.
After more than a decade of hiring people on a daily basis I’ve seen a thing or two when it comes to good vs. bad practices relating to the process of hiring employees. During that time I’ve also made my fair share of mistakes in the people I’ve hired which offered up a plethora of learning opportunities. What I've learned over the years is that making a hiring mistake can be costly and most of the time it is the employers fault the hire doesn’t work out, not the new hire themselves.
Hiring an employee is an interesting and vital part of business. Interesting in that the end result is bringing on a new person into your company with the idea that they will fulfill a role to help the company move forward. Vital, because hiring really is one of the most important activities a business can do outside of generating revenue. Without revenue streaming in there is no need for hiring and no company for that matter, which is why I’ve placed generating revenue a tier above hiring.
The act of hiring is often whimsical and mythical in nature, like a unicorn. Everyone loves to say they’re great at interviewing as they enjoy saying “I know how to pick em”, or “I’m able to sniff out the best from the worst in five minutes”. I always enjoy a good chuckle when I hear comments like this because the reality is that these words often stand on hollow ground. While we love to think we’re great at the process of identifying, vetting and selecting the best people the facts tell a different story:
With stats like this you’d think companies would focus more on their hiring process and approach to improve this area of the business similarly to how they spend endless amounts of time and money on activities like kaizen events and lean initiatives in order to improve yields by a couple percentage points.
In the end the numbers don’t lie as they tell us a sobering story – no one is perfect when it comes to hiring employees. However the quicker we build awareness around our actual performance in the area of hiring the quicker we can begin to improve it.
Below are the ten (10) most common hiring mistakes made in business. As you read through these make a note of how frequent an offender you or your company is with each:
Key Take Away:
The current job market is one of the most competitive hiring landscapes we’ve ever seen. Most of the people in the US workforce have never seen unemployment figures like we’re experiencing today. Orange County, CA unemployment rate in September 2019 was a staggering 2.9%. Meaning, 97.1% of people who are eligible and or able to work are in fact doing so. The numbers nationally don’t get much better, or in favor of the employer, as we’re experiencing 3.5% unemployment nationally. The last time the unemployment rate was this low was in 1969. What does this all mean – it’s a candidates market, not an employers market.
Most, if not all, the good people and therefore candidates are gainfully employed. If you want to improve your chances of landing great employees to help grow your company you need to ensure your hiring practices are addressing and or solving the 10 hiring issues mentioned above.
If you or your company struggle to hire great people one of the best things you can do to correct it is to seek advice and an alternate viewpoint. Ask your employees why they were for your company, learn what matters to them most and why they stick around. Another way to gain insight is to bring in an HR or recruiting consultant to review your current processes. Outsiders can often times see things quicker and easier than you can as they aren’t coming from a lens that is within the company. Their outsider perspective can provide unbiased feedback on the things you need to do to attract better talent.
It’s amazing to learn than an estimated 70% of companies don’t have a specific process they follow to ensure their hiring process is streamlined and effective. As a result HBR identified that 80% of turnover is due to poor hiring decisions which can be directly correlated to a lack of planning and consistent processes along the way.
While this sounds scary, we do know what it takes to be successful in the hiring process. We know this because we can look at where company’s struggle in the hiring process and then use that information to improve our own processes.
The eight reasons company’s struggle to hire great people are, in no particular order:
Key Takeaway: Be prepared to lead your hiring process with your company’s WHY and get a plan in place!
Action Item: Craft a specific plan for your hiring process including what you need in a new employee. Get a couple key people involved, ensure they are trained on how to interview, while making sure everyone is on the same page with what the company needs in the new person before you start interviewing. Everyone should be interviewing using the same criteria and scoring. Decision making should be left up to one or two people, not a kumbaya group agreement.
About the Author
Travis Smith is the founder and managing director of Square-1 Engineering, a life sciences consulting firm, providing end to end technical project services to companies which design, develop and or manufacture products in Southern California. He successfully served the life sciences marketplace in SoCal for over 15 years specializing in engineering services, consulting, project outsourcing and leadership development. In 2019 he was recognized as a ‘40 Under 40’ honoree by the Greater Irvine Chamber of Commerce as a top leader in Orange County, CA.