Most executives agree about the importance of having the right talent in place. Jim Collins, in Good to Great, talks about getting the right people on the bus (and getting the wrong people off) as a common strategy of great companies.
Some companies endeavor to apply a ‘best practices’ approach to talent acquisition, development and retention. Schlumberger, for example, continues aggressive pursuit and development of top talent in both good times and bad. This has resulted in deep bench strength and a reputation for the most talented employees in the oilfield services business. Financial results have been strong, and approximately 80% of top management started at the company right out of school. Further, attrition of high potential individuals is treated as a catastrophic event, warranting the same full-blown investigation as a major downtime event on an oil rig.
Many organizations apply various ‘just in time/ lean & mean’ approaches, which certainly have their advantages. But obvious downsides include a thin bench and inability to scale when appropriate. When a key defection or promotion occurs, a very painful and expensive vacancy can result in significant opportunity costs.
And of course, we all know of firms for which the “people are our greatest asset” claims are merely rhetoric.
Regardless, few would argue that many US industries are entering, if not well into, an improving economy with opportunities for growth. Corporate America has significant cash reserves, and seems ready to start spending some of it. The markets for high-level software engineers, management consultants, healthcare/life sciences and other professionals are hot. This fact accentuates the critical nature of acquiring, developing and retaining the best talent possible. Many top executives are betting the company, not to mention their own careers, on the ability to solve this talent challenge. Failure will be very costly.
We are entering what some have described as a “perfect storm,” in which acquiring and retaining top-tier talent will be extremely difficult. Combine the expanding economy and increasing demand with today’s demographics and trends, and a severe talent shortage looms on the horizon.
Talent Is Becoming Scarcer
The baby-boomers will retire at an increasing rate in the immediate future, with a deficiency of suitable replacements due to sheer lack of numbers in Gen X. Additionally, statistics indicate a significant decrease in graduating engineers, scientists, technical specialists, etc. And as technical functions are placed offshore, much of the foreign talent that has fortified the US technology industries’ prosperity over the last decade will follow. As Manpower CEO, Jeffrey Joerres, states, “Every body counts.”
Talent Acquisition Is More Difficult
The improving economy and job market result in increased demand and increasing competition for that talent. Both employed and unemployed candidates are evaluating numerous attractive options and often receive multiple offers. Candidates won’t accept lowball offers because they now have options. Potential employers who have long interview or decision processes before making offers are now losing desired candidates to more aggressive and decisive competitors.
Retention Is Getting Harder
This demand vs. supply-based competition for talent will naturally put pressure on top producers as other organizations attempt to poach. Are these valued and targeted individuals especially receptive because they feel over-burdened or under-appreciated… and under-rewarded, as a result of corporate purging/downsizing over the past few years? It is said that good people join good companies, but quit bad bosses. A competitor’s attempted (or successful) poaching of a company’s human assets can cause turmoil, distraction, poor morale, and considerable expense, not to mention huge costs related to lost opportunities.
Some Best Recruiting Practices
- Develop a performance profile. Define success; specify and prioritize what a person must accomplish to be successful. What has the person done to indicate they can do these things for others? This should provide the most important evaluation criteria, along with cultural assessment. And know that the best performers are not necessarily the best “interviewers.”
- Have a strong talent pipeline.
- Tighten up the recruiting, evaluation and decision making process. An organized and crisp process is very impressive to a strong candidate. And the opposite is especially true! The experience should be professional, engaging, and challenging, and the candidate should be treated the same as an important customer. Immediate response, prompt interviews and feedback, consistent positive messages and evaluation criteria from all interviewers, followed by decisive action will contribute to a positive impression. Create a compelling (not inhibiting) process to attract the best talent.
- “He who hesitates is lost.” Candidates’ positive emotional momentum will fade as days and weeks pass, leading strong candidates to be more receptive to firms that know he’s the one they want. Time delays create opportunities for a competitive suitor to beat you to the punch for an all-star. Today’s market dictates urgency and demonstrated enthusiasm.
- Sell the vision, career opportunity and organization. Do not assume that a candidate knows the things you know. Don’t treat candidates as commodities. Recruited candidates are usually not looking, but are receptive to better career opportunities, and must be convinced of the advantages of your offer. Why would a happily employed person quit a good job, possibly relocate a family, to take the job you’re proposing?
- Recruiting is a team sport. Stay involved and work closely with the entire recruiting team to make sure the vision, challenge and career opportunity are presented accurately and enthusiastically, and that candidate concerns are resolved. According to interviewing expert and author of Power Hiring, Lou Adler, “Making a good recruiter a partner (not a subordinate) in the hiring process can make productivity soar.”
- Pursue 2-3 good candidates in parallel. Favored candidates sometimes decide to go in other directions, requiring time-consuming and expensive restarts of the process if a single-candidate approach is taken. Having suitable backups in the wings helps to ensure success in the short run.
- Create a win-win proposition. Make a good, acceptable offer. Uncompetitive comp packages make recruiting the best people very difficult. Lowball offers insult the best executives and frequently result in turndowns. Don’t let a few thousand dollars stand in the way.
- Be flexible. Each individual is different, has different priorities and issues, and may require a tailored process or accommodations after joining the firm. The willingness to accommodate a top performer’s needs frequently is the key to acquiring and keeping that person.
These approaches must be taken now to win this war. Your success may ultimately depend upon it.