Is your next hire a peach or a lemon?
Is your next job a peach or a lemon?
How will you know before it is too late?
A few days ago, on The Economist Radio, Andrew Palmer and James Astill were discussing George Akerlof’s 1970 paper, The Market for Lemons: Quality Uncertainty and the Market Mechanism. Akerlof identified that where information asymmetry between buyers and sellers existed, it will cause a market to degrade, leaving only lemons. To overcome this, certain signals can be used to try to overcome the information asymmetry.
Andrew and James linked this to recruitment, where employers use education as a signal to indicate whether one potential employee might be better than other. Some also use credit scores, although they acknowledged how this could be discriminatory.
The recruitment industry is a great example of this. To be clear though, I am not suggesting that some recruiters, candidates or jobs are lemons, but rather the decision to hire someone or to accept a particular role can be viewed, with hindsight, as a peach or a lemon.
Whether you are looking for a new job or a new employee, the recruitment process should be all about correcting this information asymmetry. For employers, education, career progression, skills, achievements can all be useful signals. For someone looking for a new job, speaking to people who work at the company, annual reports, glassdoor can all provide useful signals.
However, all too often this does not correct that information asymmetry. You need to go further than that. Conducting a job analysis of the behavioural requirements and then matching that to a psychometric profile of a potential candidate, with valid interpretation, will go a long way to addressing that information asymmetry for both employee and hiring manager.
The renewable energy industry in Australia is still really in its early stages of growth and this will present many recruitment challenges. There will need to be a migration of talent from other industries. Ensuring these hiring decisions are peaches will require more rigour than many in the energy recruitment industry seem to provide.
Freshwater Group is a renewable energy recruitment business that focuses on all renewable and low carbon emission, energy efficiency and disruptive clean technology businesses as well as energy infrastructure, storage and management.
- Posted by Freshwater Group
- On August 10, 2016
- 0 Comments