Executives and managers are quick to utter the mantra that people are their most vital asset; but when it comes to recruiting, most still focus on efficiency, doting on cost-per-hire and time-to-fill -measures unrelated to the caliber of those being recruited.

While companies generally do give attention to quality at senior levels, that focus diminishes the lower the position is in the organization's hierarchy. Yet at most levels, quality-of-hire is the true key to organizational performance. In the book Talent Force: A New Manifesto for the Human Side of Business,¹ authors Rusty Rueff and Hank Stringer tell business leaders, "For your organization to thrive, you need quality talent in everyone from the CEO to the custodian."

It is ironic, then, that in a recent survey of mid-size and large employers, Authoria found that almost 70 percent say improvement in quality-of-hire is a business imperative, but over 60 percent of respondents do not even track quality-of-hire.²

While organizations concentrate on efficiency metrics rather than new-hire quality-the truly desired outcome-the external workforce is changing. The talent pools from which all must draw are quietly and rapidly evolving in ways that will make it ever more difficult to recruit high caliber people at every level. Indeed, the Recruiting Roundtable, in its survey report Maximizing Returns on Recruiting Investments,³ says recruiting executives must prepare "to fight a talent war that promises to make those of the late 1990s look tame by comparison." By definition, high quality talent is always scarce. Now, demographic and other changes will make it more so. Organizations therefore need to act now to ensure their ability to recruit competitively tomorrow.

The value high-quality individuals bring to an organization has real financial impact. Research by the Recruiting Roundtable shows the production of "star" performers can be up to three times that of "average" performers. The same study also reveals that the real cost of a bad hire can be up to twice their salary.

The accelerating decline in workers of prime age forecasted by the U.S. Bureau of Labor Statistics is only now being widely acknowledged by employers. A recent report by the Society for Human Resource Management finds 51 percent of mid-size employers and 23 percent of large employers are just becoming aware of the issue, while those having implemented specific policies and management practices to cope with it comprise only 5 and 18 percent, respectively.⁴ And, aging is just one of the factors expected to increase talent scarcity. Now, fear of terrorism is leading to tighter immigration policies, making it more difficult for talented workers to enter countries where their abilities are needed, and conversely, for employers to work firsthand with offshore providers. Other workplace trends, such as home and work life balance considerations, reduced loyalty to employers, and growing elder-care responsibilities are likely to further reduce talent availability.