Four Rules of Talent

While human intervention is important to candidates and to hiring managers, we have to change when and how we intervene. As I have written about many times, the skills we need are vastly different from those that ensured success five years ago. In my view, success in our profession is really all about how we interact and live with the four simple rules I’ve outlined below. Each of these rules has been tested over the past five years and stands strong. They cannot be argued about nor can we choose to like or dislike them. They are the way it is and we have to adapt to their implications if we are going to be successful.

1. Talent is scarce and getting scarcer. Talent, defined as people who possess the skills, capacity, motivation and energy to create value for your organization, is increasingly hard to find, attract, and keep. This talent is also extremely fickle and mobile. The average tenure of employees in the American workforce is around three years. This means that half of us, at least, change employers every 3 years. This applies to the senior-most levels as well as to entry-level employees. Some organizations report more than 100% annual turnover. Traditional methods (e.g. job postings, job boards, web site postings) of attracting talented people are losing their effectiveness. Instead, emerging networked, community-based, and referral tools are gaining in effectiveness (e.g. Jobster, H3, email, employee referral programs). Retaining talent is also an increasingly tough area, and again traditional methods (e.g. higher salaries and more benefits or perks) are less effective. Employees are seeking better managers who can coach and guide their careers and who care about them as people.

2. Talent is wherever it is. Talent is found everywhere and recruiters have to recognize that. The talent equation is complex. Good people are found in both the active and passive candidate pool, as well as from within the current employee population. College students also are poised to become strong talent given fertile working conditions and solid managers. While even five years ago external recruiting was a very effective primary way to find talent, in many industries this is no longer true. There are no single good sources of talent and there is no one reliable source. Talent is wherever it is. It may be less expensive and faster to develop the talent you need (e.g. nurses or technicians) or to seek out talent from your current employee pool. What this requires is a broader and better defined set of selection criteria. The focus has to shift to selecting people for basic skills, key behaviors and for their accomplishments. Traditionally we have relied on “input” indicators to find talent. These are degrees, years of experience, and proof of previous activity. These “inputs” do not necessarily mean that the output will be good. There are numerous ineffective employees who have stellar “input” criteria. What does matter is what the person’s behavior is like and what their success or failure has been. Evidence of frequent financial success, for example, under a variety of conditions may be a much better indicator of financial skill than five years of experience without such evidence. The trick, of course, is getting the evidence you need to make a decision. Almost by definition, output-based criteria are more difficult to get than input criteria, but they are also much more valuable.

3. Develop talent or lose. Throughout the 20th century, talent was easy to find and easy to employ. Work was less skilled, and most organizations could quickly assimilate a new employee through some very basic training programs. If an employee had worked somewhere else for a while, then the training required was even less. Training and development were seen as perks and not as essential to success. That has changed as talent has become more a competitive advantage and less abundant. Now, talent has to be developed. This is the only way to guarantee that there will be a supply of talent no matter what happens in the marketplace. Manufacturing companies long ago realized the value of developing their own proprietary sources of raw materials. Service organizations are just now understanding that the ability to do this on a consistent basis is a competitive advantage. Changing to a development philosophy after 100 years of acquisition philosophy will take time. Only the best see it, but they are prospering mightily. General Electric consistently posts great profits and increased sales that can be attributed to its extremely well-developed leadership. So do IBM and a host of other firms. Not all development is formal or expensive. In fact, most of what we learn (maybe as much as 90%) is from informal sources such as books, friends, networking, observation, trial-and-error, and inquiry. Environments where people exchange ideas and teach each other are emerging in the best organizations. This allows recruiters and managers great flexibility in finding and placing people where they are needed.

4. Technology is both talent blood and glue. Technology is blood, as it carries the life sustaining “nutrients” or information and decisions about talent to each cell of our organization. Technology is also the glue that holds disparate systems together and makes sense out of what we see as chaos. By integrating a complex mixture of websites, referral tools, collaboration sites, screening material, application, and candidate relationship management software; effective organizations will achieve a systematic paradise. Candidates can be attracted and “sold” by good websites, vetted and recommended by screening tools, and educated and informed by the various collaboration and communication tools at our disposal. Without these tools we limit our reach and narrow our sources to the point where we will most likely fail. By using and mixing these tools in ways that deliver good talent to us and to our managers when needed, we ensure our success.