In April of 2017, two senior partners with McKinsey & Company; Mary Meaney (Paris) and Scott Keller (Southern California) authored a book called Leading Organizations. In their book Meaney and Keller addressed ten most basic challenges facing leaders today the first of which is attracting & retaining the right talent.
Much to the astonishment of several senior leaders, nothing is more pronounced today as 30 % of all employees are looking for new career opportunities. The Canadian Labour Market remains favourable for job seekers and the result is twofold: for organizations, the competition for talent has grown fierce and they have to work harder to attract and retain the workers they need to drive their business. For job seekers, opportunities abound, and it’s become increasingly common for workers to yearn for change at some point or another.
In a study conducted in November, 2019 by the Indeed Group they found that many people are planning to make major shifts and change careers altogether (jumping from, say, a role in marketing to one in finance). Others, however, are making more subtle changes and looking for new roles in the same field, but at different companies. Either way, job seekers are becoming more active in their search for the best job opportunity. In fact, according to a recent Indeed survey, the average Canadian has had five jobs and has worked at four companies.
Indeed conducted a study to further understand job switching behaviour. What they found is that almost a third (32%) of respondents plan to change jobs within the next one or two years, and 25% have been actively recruited by another company in the last six months. Moreover, a mere 16% plan to stay with their current company for the next five years and this is taking into consideration our current Covid 19 environment.
Why Is Talent Important To Organizations?
Talent is important to organizations because superior talent has a tendency to be five times more productive than average employees. Meaney and Keller note that in a recent study of more than 600,000 researchers, entertainers, politicians and athletes; there was a 400 % difference in productivity when comparing superior talent to average talent. Canadian studies of businesses reveal that the gap in superiority rises as jobs become more complex. In highly complex occupations, the interaction and information exchange coupled with the intense work of managers, developers, researchers and like are as much as 800 % more productive.
“Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B & C players”The Late Steven Jobs, Apple, The war for Talent.
The single largest constraint that organizations have to contend with today is the ability to hang on to talented people because talent is scarce. The “War For Talent” is a coined phrase that refers to the never ending battle to attract and retain talent in an advanced economy, at a time when too few workers are available to replace the baby boomers leaving the workforce.
In March of 2019, Stats Canada reported that for every job hire a company receives 250 applications. That is a hiring ratio of .40 %. What that says is that it is harder to get accepted into Harvard Medical School (6.1%) than it is to be hired for a job in Canada This fact is backed by Meaney and Keller’s article research that showed Walmart had 230,000 applicants for 6,000 jobs (2.4%). Several Human Resources Professionals (HRP) point to the fact that one key element is that applicants just do not have the skill set (talent) to do the job and this challenge can even be more pronounced for organizations that have higher complex positions where stronger performers have a greater bottom line impact. Not to down play any jobs but, highly multi skilled trades personnel, heavy duty mechanics, commodity traders, procurement agents, merchandisers, accountants and specialized medical agents and engineers are just a few jobs that come to mind. Basford and Schaninger also point out that as Baby Boomers retire and take their experience with them and companies place emphasis on reducing costs, it makes it tougher on HRP’s to attract and maintain talent.
Fabrizio Gagliardo, Talent Acquisition & Development Manager, Ferrero Canada says; “its not only a war for talent, it’s a war for individuals. There is just not enough individuals available to fill the job opportunities”.
Adding to the war for talent and availability dilemma is that as top talent becomes increasing scarcer and companies are not on top of their recruiting game; some organizations will find that the top talent has been cherry – picked by other organizations that are prepared in their recruiting strategy. This coupled with the fact that the millennial generation (born 1981 – 1996) are far less loyal than their parents the war for talent will go to a whole new level.
Canadian Labour Statistics show that employees stay at each job for 4.5 years and the average expected tenure of younger employees is approximately 2.2 years. Paul Maher, Human Resources Manager, Martinrea International says that “companies often under estimate the costs associated with turnover and the recruitment process associated with filling complex positions.”
Stephanie Bradley, Human Resources Generalist at Hammond Power Solutions says that the more intensity, information and interaction required to fill complex positions is a true indicator that the threat to productivity increases as a person leaves the company. When talented people leave says Bradley, “the more time and money must be invested in the recruiting and onboarding process and this is just a start. If that talent leaves and pursues a career with the competition, the new employer now has a strategic and operational advantage and that cost is impossible to calculate”.
The McKinsey Global Institute (MGI) suggests that employers in Europe and North America will require 16 to 18 million more college – educated employees in the 2021 year than are available. This is an astonishing statistic given the fact that organizations in Canada may not be able to fill one in five roles they require, much less fill them with top talented applicants which would reflect a one in ten roles that are required.
In our advanced world wide economy, it is conceivable that up to 90 million applicants could lack the skills required for full time employment. MGI goes onto to say that developing economies will face a shortfall of 45 million employees with a post secondary school education and high skills qualifications.
Attracting Top Talent.
In speaking to several HRP’s from a wide diverse group of companies, including public and private sectors, there seems to be a strong reliance on 15 key strategies that organizations may wish to consider in the 2021 year when it comes to attracting top talent. Although not in order of importance and acknowledging that not all 15 may apply to all organizations and sectors; there is an abundance of energy around these techniques. Further, I will not expand upon each item because they may have a different meaning and execution plan depending on your organizational climate and intent.
(Note, if someone wishes to contact me and ask for my input as it pertains to these strategies I’ll gladly and complimentary provide such)
- Leverage existing employees,
- Create a positive corporate culture to captivate talent,
- Build employer brands on social media,
- Put people first,
- Employ the use of Artificial Intelligence to make recruiting more effective,
- Develop and utilize education outreach programs,
- Attend as many job fairs as possible,
- Offer clarity, conviction and career opportunities,
- Know your Employee Value Proposition (EVP) by making your offer magnetic,
- Understand your target audience,
- Employee campus recruiting techniques,
- Have a flexible strategy,
- Add perks,
- Employ a shorter time to hire guideline,
- Utilize technological recruiting strategies.
Retaining Top Talent.
Managing employee retention is difficult at the best of times but, managing employee retention through uncertain times can be an impossible task. Balancing an optimal retention strategy with an engaging workforce and corporate financial reduction measures can be taxing on all HRP’s and the clients that they serve.
Retaining top talent begins with a smart Retention Strategy. A Retention Strategy incorporates policies and plans that organizations follow to reduce employee turnover and attrition and ensure employees are engaged and productive long-term.
The key challenge for businesses is ensuring a Retention Strategy aligns with business goals to ensure a maximum return on investment.
A strong Retention Strategy considers:
- Employee Value Proposition,
- Employee salary, benefits and bonus,
- Workplace flexibility,
- Career development,
- Strong leader – employee relationship,
- A good employee experience.
Employee Value Proposition (EVP):
An EVP is quite easy to understand. It is comprised of three principles. They are:
EVP 1 = value the skills, experience, personality and intrinsic elements that the employee has to offer the company.
EVP 2 = value growth opportunities , culture, benefits, salary and career opportunities that the employer has to offer.
EVP 3 = difficulty in replacing the employee should they decide to leave your organization.
The calculation of the EVP is also quite easy to understand. Most organizations employ a Weighted Paired Comparison Analysis (WPCA) in order to emphasize the importance of each of the aforementioned EVP elements and decide as to where the emphasis ought to be.
Employee Salary, Benefits & Bonus:
Here is the all important question. Is the salary, benefit and bonus package that the organization is offering?
It is no great secret that employee compensation considers three variables. The geographical location of the company, the qualifications required to perform the job and the difficulty in replacing the individual should they leave. The third variable is all about talent. As jobs evolve in complexity, difficulty in replacing individuals based on their knowledge, ability, skill and connections become extremely important. As one HRP told me; “we pay in the 80th percentile for talent because we know if we don’t, we’ll pay much more in the recruiting process.”
In 2019 the Angus Reid Institute stated that 33 % of all individuals who left their job did so because they felt that they were not being fairly compensated and the Canadian Human Resources Professionals state that the investment to recruit a talented replacement is approximately $ 35,000.
Given the current work environment and the needs of individuals, workplace flexibility has become a new tool for attracting, retaining and engaging employees. Workplace flexibility emphasizes the willingness and ability to adapt to change, particularly regarding how and when work gets done. In a flexible workplace, the needs of both employee and employer are met.
With 25% of all Canadians saying that they rather work from home after the pandemic subsides and 30% saying they would be fine with working in the office two to three days per week, steering away from the traditional 9 – 5 work structure is mandatory in attracting and retaining solid employees. A structure that dictates the whereabouts of an employee is now moving to a model of flexibility that improves employee satisfaction.
“Talent matters because of its scarcity, high value and difficulty in replacing it.Paul Maher, Manager, Human Resources. Martinrea International
Workplace flexibility is more than creating employees schedules that best fit their needs or allowing them to work from home. It can include all kinds of working arrangements depending on the organization. They may include:
- Flexible arrival and departure times,
- Work location independence,
- Compressed shifts or workweeks,
- Part time work from home.
Workplace flexibility is a phenomenon that is here to stay as human capital gets leaner.
Career development is the process of choosing a career, improving your skills and advancing along a career path. It’s a lifelong process of learning and decision-making that brings an individual closer to their ideal job, skillset, and lifestyle. Gone are the days where an employee has one job for life. Individuals coming into the workplace may have up to eight different jobs in their career and talented ones expect each job to improve their ability, skill and knowledge. The question smart organizations are asking; can those talented individuals have all eight different jobs in our organization.
Organizations might like to consider taking a personal interest in employee career goals, promote training and personal work life balance and encourage mentoring and coaching.
Strong Leader – Employee Relationship:
Approximately 24 % of employees who left their job in 2018, did so because of a toxic working relationship with their leader. A leader and employee relationship is not only important to company productivity, it is the foundation of employee retention. A relationship that is built on trust and understanding can make the employee and leader relationship much more efficient and pleasant. A poor relationship that lacks cohesiveness will dampen productivity and lead to high rates of employee turnover.
A Good Employee Experience:
A strong Employee Experience encapsulates what people encounter and observe over the course of their tenure at an organization. Every company invests in the customer service / experiences and as organizations increasingly recognize people as their greatest assets, they’re investing in the employee experience as well.
A positive employee experience in most cases requires more than showing up to work (virtually or physically), finishing your tasks, leaving and getting paid. Ideally workplaces have more to offer – like learning and development opportunities.
“The employee experience is the journey an employee takes with your organization. It includes all the interactions an employee has with your organization before, during and after their tenure.”Fabrizio Gagliardo, Talent Acquisition & Development Manager, Ferrero Canada
The essence of a good employee experience is underscored by great communication, transparency and trust. A good employee experience begins at the time of hire with the onboarding process and includes feedback, coaching and mentoring, autonomy and fair compensation.
In order to treat people equally you must treat them differently because they are. There is no “one size fits all” strategy associated with attracting and retaining the right talent. This topic has been a sore spot for several organizations over the past decade and given our current and future business environment, organization will need to address this challenge now in order to be competitive in the future.
Based on my experiences, this is one area where I believe municipalities (public sector) have out done private sector organizations over the past ten years. It appears that municipalities recognized the challenge ten years ago and took some major steps in bridging the gap. They have hired and retained some of the sharpest minds around. Perhaps others can take a lesson from them.
Leaders will be required to reinforce the message that the “The Right Talent” designation is not primarily an acknowledgment of past accomplishments but, mainly an assessment of future contributions. The right talent initiatives must challenge and cultivate rising stars, not just celebrate today’s high achievements. Talented employees are the individuals who will launch new businesses, find new ways to reduce conversion costs, build better client and professional relationships and drive innovation.
About The Author.
Nicholas Pollice is President of The Pollice Management Consulting Group located in Niagara, Ontario, Canada. An international presenter and consultant, he is known as a leader in operations management. Nicholas conducts programs in leadership, supervision, communication, negotiation and conflict resolution. He has been a consultant since 1989 and is the author of several professional publications. His presentations have been consistently ranked in the top10 % throughout North America. See Nicholas’ bio, his other publications and services on the PMCG. Website at www.pollicemanagement.com