The impending war for talent

(August 2008) In the war for talent, companies need to realize that the days of success using a traditional approach to recruiting are over, and attracting qualified applicants will require a strategic approach.

In a webinar on Tuesday, Rich Kushner, vice-president of market strategy at Pittsburgh-based talent assessment firm Select International, had a stark warning about today’s recruiting landscape. “The traditional approach to filling roles — assuming there is a deep pool of candidates to choose from — is over”

He explained that talent is being looked at by companies in a very different way than it was in the past. According to data from the Aberdeen Group, the search for talent has moved to the number two spot on the list of employer concerns in 2008 from the number eight spot in 2004.

Kushner says there are three fundamental drivers for this shift. The first driver is workforce demographics, which have undergone colossal change over the past decade. Low fertility rates in the large, developed economies of the West are combining with the impending exodus of boomers from the workforce to create a dearth of new applicants.

The second driver is the 21st century worker, personified by generation Y, or the millennials. “Generation Y is a unique generation,” said Kushner. “They’re a bit pampered, a bit spoiled, and have a live and work, work and live paradigm that’s significantly different than the one their grandparents held.” He explained that millennials are more likely to jump jobs, demand more of their employers, and expect more flexibility, making them difficult to retain.

The third driver is related to emerging global economies, as nations once referred to as the Third World come into their own. “We’re undergoing the most rapid economic expansion in human history, and it’s having profound talent implications,” explains Kushner. He says the past 12 years of global productive output matches the total output from time immemorial, up until 1996, owing largely to emerging economies. This phenomenon is global in nature, he says, and it will affect all industries and geographies.

He explained in the webcast that virtually all executives are now aware of the coming talent shortage, but few know what to do about it. However, one positive result of this shortage is that companies are finally realizing the importance of their people. “People are,” Kushner said, “probably for the first time in history, the most important asset.”

Competing effectively in the new era will require a strategic and integrated approach to talent acquisition, he added. A largely misunderstood aspect of an organization’s recruitment effort is employment branding, or the public perception of what it’s like to work for that organization, particularly with regard to the internet. “Whether or not you’re consciously trying to develop an employee brand, the internet is almost certain to create one for you,” Kushner said, adding that the internet is also the only long-term method of recruitment and retention.

Talent culture is an important part of retaining valued employees. “Are you deliberately fostering a culture within your organization that’s going to make your organization a place people want to come to work? When they’re there, will they stay?” Kushner holds up Toyota as an example of a company whose culture includes respect for people and continuous improvement. “Those two dimensions… tend to make for a happy workforce.”

Finding new ways to source and recruit employees should be a priority for all organizations and Kushner encourages companies to take a hard look at their practices to see if they have gone beyond contingency-based recruitment into non-traditional areas such as creative advertising techniques, and viral networking. There are now ways to ensure talent availability, beyond staffing and contingency processes, including techniques that employ pre-screening and assessment.

There are some companies who feel that as the talent pool dwindles, so should their reliance on web-based applicant acquisition. Such systems though, allow companies to manage the pool of talent they are faced with, regardless of its size. Kushner points to the fact that because today’s university graduates are fully wired, saying companies which fail to reach out to the online community will likely lose the talent war.

Most organizations are fully aware of where they are currently and where they would like to be in the future. The difficult part is how to get there. In his view, empirical data is invaluable — using both a qualitative and quantitative approach is the most efficient way to address talent acquisition needs.

The qualitative approach measures which characteristics of your company will be attractive to top talent, the likelihood your firm can identify optimal employees, and its prospects for keeping them. The sum of these indexes can be used to determine the access a firm really has to A-level talent, and identifies where the company is struggling in its talent acquisition efforts.

The quantitative approach directly examines the company’s current talent acquisition processes against a more optimal approach, and produces a calculation of costs, including the hidden cost of poor hires and loss of valuable workers.

Kushner had a final warning for those who feel that they will be impervious to the shift in the talent pool “The talent shortage is going to affect all industries in all geographies,” he said. “Hopefully we have disabused you of the notion that your company will be free from this.”

This story first appeared on BenefitsCanada.ca.

Filed by Jody White, BenefitsCanada.ca, jody.white@rci.rogers.com