The “war for talent,” a term coined by McKinsey & Company in 1997, refers to an increasingly competitive landscape for recruiting and retaining talented employees. Inherent to “talent,” in this use, is not a set of superior human resources processes, but a mindset that emphasizes the importance of talent to the success of organizations. The underlying assumption is that for knowledge-intensive industries, the knowledge worker is the key competitive resource.
Factors contributing to an intensified battle for the best employees include:
• Candidate pool shifts in the United States and Europe and increasingly in India and Asia, as the quality and size of the graduate pool grows year on year, with a mobile, globalized workforce that broadens employee base
• Changing demographics that increase demand along with decreasing supply—Simply put: there are fewer post-baby-boom workers to replace the baby-boom retirement in the U.S. and Europe (though this is not the case in most of East Asia, Southeast Asia, Central Asia, Central America, South America, or the Middle East).
In today’s war for talent, talent seems to be winning. Companies need to expand both knowledge and resources to compete. As every leader knows, thriving businesses produce optimal results with two key practices: hiring of the best talent and nurturing and managing these employees, providing long-term attractiveness as great places to work.
SO WHAT ARE THE KEYS TO CREATING A GREAT PLACE TO WORK?
In summary, there are those companies that offer the best recruiting and retain
the best talent. Then, there are those companies that attract talent and have reasonable retention. Finally, there are those who do attract talent until that talent gets through the door of those who offer the best in employee amenities. So what does it take to be in the first tier as opposed to being an incubator or talent clearinghouse?
The Great Place to WorkInstitute® Trust Index® measures Credibility, Respect, Fairness, Pride, and Camaraderie as defining what aspects of the employer/employee relationship make for a great place to work. The principle is that without these base tenets in place, a substantial salary package on its own won’t ensure good retention rates. These employer attributes are actually more important to employees than salary in isolation. The takeaway for employers is that the work environment, space, culture, and employee amenities and convenience comprise a compelling overall package for prospective employees.
WHAT ARE THE QUESTIONS TO ASK OF YOUR ORGANIZATION?
It may be that you have the best talent already. That your retention rates are great and that you have the very best products and service in your sector today. Thing is, that if all that is true today, it doesn’t mean that you will have all of those tomorrow. Look at Kodak (the Google of yesteryear), Blackberry (once the head and shoulder leader in smartphones), and even Yardley (the once industry leader in cosmetics). All came from different eras but all (you could argue) became complacent, and missed the changing customer demand. Above all, these companies didn’t have the right talent to spot these two fundamental flaws and/or develop the products as quickly as their competition.
Here are some questions to regularly ask of your business:
• What is our turnover rate in numbers of employees a year?
• What is the total cost of recruiting, training, and bringing each new recruit to 100 percent productivity?
• What is our current market position (revenues, customer satisfaction, innovation, products)?
• What is our talent index compared?
• What is our workforce demographic of today?
• What is the workforce demographic of tomorrow?
• What does our employee satisfaction survey tell us?
• What benefits and amenities do we offer today and what is the participation?
• What benefits could we offer with what business benefit?
The benefits of having a truly engaged workforce are well documented but the dangers of having a disengaged workforce can be catastrophic. The importance of having structured employee satisfaction surveys is an important health check for any business measuring survey participation with the overall satisfaction rating being key. The trick to these surveys is to understand, react with positive change, and learn trends for the future.
WHAT BENEFIT AND AMENITY STRUCTURE IS APPROPRIATE?
There are many examples of organizations that go that extra mile (or two) and the level at which your organization may want to go will be depicted by answering the following questions:
• How important is attracting the best talent?
• What is our current business cost at current retention rates?
• How would we benefit of having the best on our team? (Creativity, Product, Business Outcomes)
• What is the Return on Investment calculations that would apply to us?
• What are the benefits and amenities we want to offer?
• What is the journey and key checkpoint of measurements of success?
Creating a great place to work is no longer nice “in theory,” but today, for most companies, a core strategic imperative. If you aspire to be the best or want to maintain your number one position in your market, then making sure you attract and retain the best talent is absolutely key. You will be sure that your competitors, snapping at your heels, will be doing all they can to tempt the best-and-brightest from your ranks.
HOW ARE OTHER ORGANIZATIONS ADDRESSING BENEFITS AND AMENITIES?
The range of potential workplace amenities is as vast as the imagination. I have witnessed everything from the convenient to the extravagant, from free bagels and free beer and wine on Fridays to bring your dog to work to “big idea” paid time off. I’ve seen complimentary grocery shopping and delivery and employers cleaning employees’ houses, workplace physician clinics in the workplace, and free food programs. The list is long, indeed, and never ending.
Referring to the Maslow’s Hierarchy of needs, once you have attracted the talent (Physiological and Safety), the task is then to ensure that you are creating the right circumstances (Belonging and Esteem). However, at the top of the hierarchy, can you create an environment of self-actualization that delivers superior performance?
WHAT DOES BEING A BEST COMPANY MEAN?
The Great Place to Work Institute® provides some metrics with being recognized as a great place to work:
• Best Companies perform more than two times better than the general market.
• Nearly one in three U.S. employees is seriously thinking about leaving their current organization.
• Two-thirds of college graduates said they would take a pay cut if they knew they were making a difference in their job.
• 91 percent of Millennials expect to stay in their current job for less than three years.
• On average Best Companies receive 47 percent more applicants for jobs than their peer organizations.
• Best Companies experience as much as 50 percent less turnover.
• Employees in high trust environments are twice as likely to talk about their employer with pride.
• A workplace that is fun is a much more attractive proposition to today’s emerging Millennial workforce.
HOW CAN YOU PREPARE YOUR WORKPLACE FOR THE TALENT OF TODAY AND TOMORROW?
There is a whole range of employee amenities available with different costs and benefits to your workforce. It is a critical element of the process to understand your workforce, demographics, likes, and dislikes, ensuring that the workplace and amenities match your current workforce and also your workforce of tomorrow. Older, more mature companies are dealing with their own organizational demographics, as they see the need to shift from an older workforce to attract tomorrow’s talent and superstars, requiring a very different workplace experience from that of the past. As the workforce demographic is changing, not only in terms of age but also in terms of country of origin, culture, and even religion, the workplace needs to be nimble and flexible enough to adapt and accommodate those changes.
The war for talent is real, and businesses need to cater to today’s needs by striving for a balanced team of diverse talent. An optimal team has performers at every level—superstars, journey men, and average, but steady-and-reliable performers. The most successful teams do not swap and change as the wind blows, but have a long-term commitment to the team and talent. The winning playbook is complex and less susceptible to a common denominator. The solution cannot be a band-aid, one-time hit approach. This is a journey and a long-term commitment with the destination being sustainable growth and success.
*Abridged from an article by Simon J. Elliot, Board Member of the British American Business Council.