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The War for Talent Is Returning; Don’t Get Caught Unprepared

by
Dr. John Sullivan
Mar 19, 2012, 5:31 am ET

the Zynga Ztrium

Here is a heads-up alert for you: be prepared because not only will the infamous “War For Talent” be returning to impact your firm, but it is already underway in its full intensity here in the Silicon Valley. Begin planning for this next round of talent wars, because once the intense competition begins, there simply won’t be time to catch up with, no less get ahead of your talent competition. If you’re not familiar with the “war for talent” phenomena, it involves a prolonged period of intense competition where top applicants are both scarce and arrogant, employees leave by the droves, firms regularly raid each other for talent, and bidding for top talent is commonplace.

If you have global contacts, you already know that not just in the Silicon Valley, but also in Australia, as well as parts of Canada, India, and China are already involved in the latest round of the “War for Talent.” Entire industries like social media, gaming, and oil/minerals are currently involved in a war for talent, as are top-rated firms like Facebook, Google, Apple, Zynga, and most startups in social media, mobile phones, medicine, and technology. Here in the Silicon Valley, talent competition has already returned to near 1999 levels. For example, recently a recruiting firm sent 150 cookie baskets directly to key employees at Zynga, the social game developer. They didn’t send them to their home, but directly into the office where they could provide the maximum impact by creating a buzz and letting every employee learn that outside firms wanted them. Winning a war requires bold action not conservatism.

Examples of How Boldness Is Required in a War for Talent  

Here are a few of many examples on how firms have stretched the limits of talent management in order to remain competitive.

  • Match this referral bonus - DNAnexus, a Silicon Valley sequence storage and analysis firm, offered a $20,000 referral bonus for successful referrals for the relatively common job of software engineer.  They also threw in a full genome sequence for the employee as an added bonus.
  • Low tech drive-by recruiting – Zspacer, a cloud security firm, drove a van with a “we are hiring” banner continually around the building of its “target” competitor, Blue Coat, in order to entice the competitor’s employees into leaving.
  • Turn a job into a game – most people like playing games and competing, so turning a cashier’s mundane job into a competitive game with a score (gamification) can make it more fun. While at the same time, an employee can know how well they are doing as an individual and compare to others.  This new “personal leaderboard” process at retailer Target has been reported to have resulted in increased cashier efficiency, lowered checkout times, and increased employee morale.
  • The death of the cubicle - rather than employees having offices, the Silicon Valley has been the home of the cubicle. But once firms like Google and Facebook found that cubicles reduce interaction and collaboration between employees (both of which are required for innovation), they took steps to eliminate them and replaced them with an open space arrangement for the team. Google goes even a step further and now offers “standing desks” (like a counter where the employee stands instead of sits), which dramatically increases the number of interactions, while also being healthy for employees.
  • Free beer for life – the Silicon Valley startup Hipster offered new hires $10,000, a lifetime supply of Pabst Blue Ribbon, “authentic” skinny jeans, striped bowties, and a pair of Buddy Holly glasses. A little weird, but innovators like weird.
  • Interview live from anywhere – most interviews take forever to schedule because they require travel to your site.  This new iphone app from HireVue allows candidates to interview from anywhere at anytime, using their mobile phone or iPad.  Now almost every candidate and manager can find time for an interview. 

Why Should I Be Concerned About This War for Talent?

An analogy between police weapons and military weapons might help you understand why a war for talent requires completely different tools and preparation. Consider the work environment of a policeman. It is a difficult and sometimes a dangerous job but the tools and strategies required to do the job are relatively basic (i.e. equivalent to normal recruiting, retention, and talent management). However, when you’re facing a real war, a policeman would be outgunned. Instead, soldiers with sophisticated equipment and strategies would be required. The tools that they would need in order to win the battle would have to be two or three times more sophisticated than those of a policeman.

The same is true when you’re in a war for talent. You need to overhaul everything and develop completely different and much more powerful talent management tools, strategies, and approaches. You may even need a completely different team of talent management professionals. To make matters more difficult in this current round of the war for talent, the recent growth of social media and the mobile platform now requires the creation of talent management tools that have never existed before. This upcoming “war” will be even more ferocious than the last because of the recent litigation and government actions to eliminate informal “no-poaching” agreements between firms. Firms that in the past have been your “friends” will now be encouraged to raid your employees continually.

Action Steps to Take to Get on a “War Footing”

Now is the appropriate time to begin preparing for this next war for talent. In order to be prepared, you will definitely need to revise your talent management strategy and you will certainly need more than a handful of new tools. The battle will require sophisticated recruiting, powerful onboarding, superior retention, predictive metrics, exciting training, and a leadership development program that can replace lost leaders rapidly. You will also need to develop a competitive analysis function to stay ahead of your competitors and a market research function in order to better understand the changing expectations of your target talent. You may even need new talent management leaders who are agile, who learn fast, and who know how to operate under “wartime conditions.”  It requires a different breed and many on your staff may not be ready for it.

There Won’t Be Much Advance Warning Before This Power Shifts to Employees and Applicants

Obviously you won’t receive a formal announcement, so unfortunately, by the time you realize that you’re actually involved in a war for talent, it may be too late. You simply won’t have time in the midst of the battle to renew your strategy, your staff, and your talent management approaches. Things that you have taken for granted over recent years like a high applicant flow, complacent candidates, and low turnover may completely turnaround in a few months. Workers who have recently demanded security will shift their expectations to include challenge, innovation, development opportunities, and an opportunity for wealth through stock options. And unless you have good metrics, you won’t realize until months afterward that the changes have occurred.

But it Seems Calm Now Where I Work!

If you work in nowhere, smaller town, USA, for example, you might think that this author is crazy because the high unemployment rates where you are means that candidates are still begging for jobs in your town. But you should also be aware that if you had been a talent manager in the mineral-rich areas of Montana, Alberta Canada, or Western Australia, you too at one time had little difficulty finding skilled labor. That is until all of a sudden, you experienced a dramatic shift in the competition for labor. You may not see the war for talent appearing at your doorstep for a longer period of time if your firm trains its own workers or if you hire mostly hourly workers with basic skills. However, if any part of your operation requires technologists, mathematicians, scientists, or experts in monetization or social media, you’ll soon find that your current approaches to talent management will become ineffective. And as unemployment rates continue to drop and the housing/mortgage crisis subsides, finding top talent will become difficult everywhere.

What Are the Foundation Causes of a War for Talent?

A war for talent is a relatively recent phenomenon because in the past, finding and applying for jobs was a slow paper- and mail-driven process. But now that almost anyone can be found on the Internet and interested people can find and apply for dozens of jobs within an hour, fighting over talent has become common. These “war conditions” occur when there is continuous rapid change in the marketplace due to intense competition. And as a result, employee skills need to be updated continually. In this situation, the shortage is not the number of people available (there may be many) but the number who have the required advanced skill sets. So, a war for talent is a skills shortage not a people shortage. For example, today if you need advanced skills in technology, oil and minerals, medical research, and social media you are likely to find plenty of labor available (due to high unemployment rates) but finding people with the right skills, in the right location with right performance levels for these critical jobs may be a continuous battle.

Final Thoughts

Many of the professionals who currently work in talent management were not in the field when the original war for talent occurred during 1999 and 2000. To those and others that may have forgotten what it was like, remember that even though talent management received a great deal of attention and boatloads of money, it was not a good time.  If you weren’t prepared, days were long and hectic and even with unlimited resources, it was a struggle to hire and retain even mediocre workers. If you don’t think the war for talent can be stressful and even ugly, connect with someone on your network who worked at Cisco, HP, or Intel during the late 90s or today at Zynga, Facebook, or Twitter.

Like it or not, the war for talent is returning and it is already at ferocious levels in the Silicon Valley and in other high-growth areas around the world. These tremendous differentials in talent demand between different business units and regions may even force large global firms to adopt a dual talent management strategy — one where you simultaneously manage for both slow and fast growth at the same time. So if you skip over this warning, please remember later on that you read it here, when there was still time to prepare.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Mike Ramer

    Yes, the war for talent is back on. Some great ideas here. The best way to recruit top talent: Partner with a retained search firm which aligns with your company’s interests. Benefits include; market competitive research, consulting on retention, expertise to secure selected candidates.

  2. Is the War For Talent Returning? Yes, It May Already Be Underway

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  3. Keith Halperin

    @ Dr. Sullivan: hank you…

    @ Everybody: Does somebody automatically send out this type of article every 6 months or so, regardless of what happens in the outside world?

    1) If you’re talking about the “Fabulous 5%” and some specialties, there’s ALWAYS a “war for talent”. When a B-average CS major from Cal State East Bay or Eastern New Mexico University (or Liberal Arts majors from almost anywhere) gets multiple offers prior to graduation, THEN I’ll believe there’s a war for talent.

    2) I don’t care what a few outlier companies do- when the typical company sends cookie baskets, has $20k ERP fees, or is willing to sign regular employees to multi-year, guaranteed-raise, no-lay-off-without-cause employment contracts, THEN I’ll believe there’s a real war for talent.

    3) Finally, when any newbie agency recruiter is getting multiple calls to contract recruit for $75/hr, and we’re all making as much or more in constant dollars as we were in the Pre-DotCom mid-late ’90s, THEN I’ll believe there’s a real war for talent.

    Cheers,

    Keith “Heard It All Before and I Expect I’ll Hear It All Again” Halperin

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  9. Kim Bannerman

    @Keith I actually *do* have 2 former coworkers/friends making in the upwards of $75/hr to contract recruit in the IT industry for a larger technology company. And they don’t work in “the Valley”. They’re remote and recruit for 2 locations on the East Coast. They’ve been in those roles for about a year now.

    So, the war for talent? Yep. It’s across all major cities in the US. Not just for Stanford, MIT, Georgia Tech or other graduates in specific IT fields, either.

  10. Darryl Clements

    I’m glad this topic comes up regularly. This round, thanks to Dr. Sullivan. I’ve never thought there was a lull in competition – just a lull in massive movement.

    I imagine many of the posts and thoughts will again center around “conventional” talent mindsets and actions. For many, a simple tweaking of older ideas to make them more contemporary is all that’s necessary. For others, getting in the game and putting up the entry fee (eg. cost of search firms and contract recruiters) will be new additions.

    These things will work for “traditional” candidates.

    However IF, as Dr. Sullivan and others suggest, talent/candidates are different, then traditional approaches will lead to incremental success or improvement.

    There are untapped game-changers. Here are a few that I’ve recommended that largely don’t get accepted because of uncomfortability with how different it might be for the company:

    1) Video or remote interviewing. Why is it that everyone thinks they have to meet candidates in person? Sure, the direct manager, peers, and senior team might. But I bet 50% of the people who interview can do video interviews rather than in-person. The only thing standing in the way is a company’s acceptance of the practice. It doesn’t have to replace in-person interviews completely, but times have changed and candidates aren’t willing to give up multiple days or half-days just because a company can’t get it’s interview team and decision-makers together.

    2) Defining what you offer as quality-of-life as equally important as pay and benefits. If you don’t regularly have employees working from home or remotely almost to a level of uncomfortability, then you probably aren’t even in the game. Suburban, small town, remote, and geographically-challenged companies should really be thinking hard about whether it’s absolutely necessary to relocate people. It’s probably a blessing to not have corporate legacy systems and infrastructure as an obstable – but ask yourself if you’re really taking advantage of it as recruitment and retention tools. Quality-of-life is what keeps people once they become employed. (Good managers fall into quality-of-life for this argument because bad managers usually upset the employee experience.)

    3) Offer more than referral bonuses – offer instruction on how to find out more from candidates. Referral programs usually fail because people don’t know how to spot talent, but it’s very rare to find organizations who help employees pull good candidates in. Referrals are often not based on actual first-hand knowledge, and it’s much easier to start finding out from the outset than further down the line. You’ll improve the quality of referrals too.

    4) Rethink how your organization can successfully compete in the new/today/future talent competition. Sports teams use this and call it Sabremetrics. Businesses usually call it metrics. What I usually see in business is the same blend of metrics from one company to the next with little variation. What’s needed is clear “ideal” candidate profiles. This is where I often see companies chasing the same 5% of known candidates rather than finding others in the 5%. What’s better, having almost no chance at successfully landing that known 5%-er or having close to 100% chance at finding the 5%-ers currently underexposed?

    5) Engage and recruit talent like you really mean it. If you want to win over a highly-specialized candidate but don’t really know anything about her/his outside interests and family, you’re behind. Think about how many people actually commit to companies because of how their family’s treated. Now think about how you connect. If there’s something traumatic or big going on in the candidates family while you’re recruiting her/him, it reduces your chances that they’ll be interested in adding another stressor to their life. But how often do you then go back to that candidate? Sure, filling today’s vacancy’s critical; but a lot of vacancies stay open because the almost candidate didn’t pan out when all it really was was lack of actually recruiting that candidate.

    5) Finally – look at talent recruitment, deployment, and retention as THE way to bring success to your business. If that doesn’t force you to drop 50% of what you’re doing and replace it with something else, look out.

    Oh, here’s my BOLD offering: Try to hire at least one person from every company you really consider your top competitors. Ask every one of them, hired or not, to rate how you stack up against their current employer or other competitors. Include questions about the length/convenience of your interview process, how well does the candidate think he/she was assessed, how much did your organization learn/focus on the candidate’s personal factors and drivers (family, current career status, needs, etc.). I will bet that most will claim not have time/resources to do this. I will also bet most who don’t still don’t know why they aren’t competitive from the candidate’s perspective. And by the way – if an agency isn’t presenting this same time of info before you start interviewing – you’re not asking them to give you info you can use going forward.

  11. Keith Halperin

    @Kim: good for them. Hopefully they aren’t the wet-behind the ears “newbies” making $75/hr while looking on Monster….

    :)

    Keith

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  22. Donna Marshall

    I wanted to share a job posting site I used recently with great success. Simply Hired reaches a wide market place and attracts various skill levels. Follow the link below to post your Job openings only $100 for 30 days you cant beat the price.

    http://northwest.jobamatic.com/a/jbb/find-jobs

  23. Keith Halperin

    Hi Donna,

    Thanks for the infomercial (I do a number of them, too.) Usually you get this next:
    “You might expect to pay $500 to post your Job openings for 30 days, but not with us, and not $300, not even $200. With Simply Hired, post your Job openings for only $100 for 30 days. You can’t beat the price!”

    ;)

    Keith “And Get a Second One Absolutely Free!” Halperin

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    Keith, Your add sounds great. I’m not a sales person just wanted to share my experience and results using Simply Hired with the group, and make a recommendation. I look forward to reading your Blogs among the other updates and news on the ERE board. Take Care, Donna

    http://northwest.jobamatic.com/a/jbb/find-jobs

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