The Quest for Talent in Turbulent Times?The War is On!

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By Beth Bresnahan

“The war for talent,? a phrase coined in

the ?90s to define the competition for qualified employees, hardly set the working world on its ear. But its relevance will likely take on new meaning as more and more Baby Boomers retire from the workforce, and companies see a lack of skilled workers to fill their vacant positions.

While the United States population is expected to increase by 24 million in the decade between 2000-2010, the ranks of the Baby Boomers, who are reaching ages 55-64, will increase by 11 million during the same time period?more than any other age group.(1) The surge will have a two-fold effect in the labor force; first through an increased demand for consumer products and services, and second by changing the age distribution of the labor force. This shift in age distribution will likely escalate the ?war for talent.?

?Great managerial talent is critical in today?s competitive environment,? says Sharon Wright, vice president, human resources, Prudential Real Estate and Relocation Services. ?We are a knowledge-based economy where people make the difference, and the strongest business plan is only as effective as the talent a company has to generate ideas and transition those ideas into reality.?

Talent is maximized, Wright adds, when the workforce is diversified, bringing to the table a variety of backgrounds, concepts and experiences.

Further, there appears to be an amazing correlation between talent management and increased profit. According to one survey, companies that are winning the talent war had returns to shareholders that were 22 percentage points higher than the average company in the same industry.(2)

As a result, according to many experts, talented people will be the most important corporate resource over the next 20 years. Intelligent, educated, sophisticated, business people who are technologically literate and understand the global economy are definitely the employees in demand?and the challenge of finding this type of employee will be met and won on two fronts.

?To be successful,? Wright says, ?companies must first change the way they view talent management and then develop strategies to recruit and retain exceptional employees.?

Retention

According to recent polls by Spherion, Gantz-Wiley and others, up to 55% of staff managers say they intend to leave their employers within one year?and ExecuNet?s 2005 survey found that 77% of all executives are ?looking to make a change? within the next six months.(3)

To boot, the stigma associated with changing jobs in today?s workforce has diminished?and changing companies has become much easier through the influence of the Internet and head-hunters. Since the true cost of an average employee who leaves is one-and-one-half times his or her salary,(4) and the cost of losing a top-performer may be incalculable, the ability to identify and retain talented individuals becomes imperative.

But the competition for above-average, top-performing employees is cut-throat, and will likely intensify as companies seek to replace retiring talent.

?Top-notch employees expect more financial and psychological rewards from their career, and they will migrate to companies that can provide those rewards and more,? Wright explains.

To attract and retain a talented employee-base, employers need to provide:

A Great Company?It goes without saying that employees want to work for a great company. Great companies can be defined as well-run, financially sound, open and trusting, where a strong emphasis is put on performance. Such a company has outstanding leadership and is well respected within its industry and by its employees and competitors.

Wealth and Reward?People want to be paid on a level commensurate with the value they create. The fact that people work for money is obvious. Money is tangible?but people also work for the reward of feeling appreciated and valued for their contributions.

Exciting Work?Top-performers want work that is interesting and challenging. They need to feel passionate about their work and believe it is worthwhile. As important, they want to feel that they are personally contributing to key business results.

Growth and Development Opportunity?A higher level of job satisfaction can be achieved through growth and development. Talented people welcome job challenges, training, candid feedback and mentoring. Development of job skills increases value and self worth. Companies that grow and develop talented individuals will profit in employee productivity and retention.

Recruiting

For many knowledge-based companies, it doesn?t matter that there are eight million unemployed in this country, because only one in eight has a degree?and the employee-base continues to shrink as job requirements are refined. In light of today?s retiring Baby Boomers, especially at senior levels, companies must always be in a recruiting mode, ready to bring in talent at all levels of the organization. In the war for talent, successful companies will view recruiting more like marketing and sales than purchasing. Strategies for success should be based on today?s labor market and changing demographics, and employers should recruit using a variety of avenues:

Employment Agencies?Employment agencies and independent ?head-hunters? aggressively seek to recruit talent from one employer for another, often approaching employees who may not have been thinking of a job change. An attractive job with a good company may draw a significant pool of talent.

Advertising?Many companies advertise open positions in local newspapers, trade publications, etc. Advertising targets a particular job profile and appeal to those who are openly seeking a job change.

Referrals?A referral, which is a personal endorsement for employment, is a powerful way to recruit. Networking is an excellent source of qualified candidates, and successful companies encourage their employees to refer.

Internet?The Internet has changed the face of recruiting, as potential employees can review job positions, post resumes and fill out applications from the convenience of their own homes. Nearly all Fortune 500 companies use commercial job-posting Web sites, as well as their own Web sites for recruiting purposes.

Strategies for Improved Retention and Recruiting

Overall, Wright says, companies can improve their retention rates by embracing the mindset that talented employees are assets. The ?talent mindset? views the success of the whole as a reflection of individual achievements. Individual?s talents are forged together to create a strong talent pool and thus achieve company goals.

To retain top-level employees, companies need to differentiate and affirm. All employees are not the same and need to be treated accordingly. Top-performers should be rewarded; solid performers should be recognized for their contributions and development; and under-performers need to grow with the organization or make another career decision.

Companies can improve their recruiting skills by examining and refining current practices.

Instituting a job vacancy report in order to plan a long-term strategy can be helpful. Also helpful is being pro-active about recruiting when there is no immediate need, instead of being reactive and only recruiting after a position has already been vacated. By developing a pipeline of qualified candidates there is less chance that you will have to rush to hire someone less than ideal.

Resumes and applications are an essential part of the recruitment process.

Taking the time to carefully review resumes and applications can provide valuable insight. Organizations must fine-tune interview skills with good questions to control the interview. The best questions require the candidate to explain the ?who,? ?what,? ?when,? ?where,? ?why,? and ?how? of their skills and work experience. Finally, check references to verify facts and solicit opinions. Almost 25% of all resumes include deceptions.(5) The most common forms of deception are overstating education and job responsibilities.

The Coping Mechanism

Competition for talent in today?s volatile marketplace will require companies to be more selective in the recruiting process?and to retain top-performing employees by fostering an environment where people are committed to being part of the team.

?But at some point,? Wright says, ?The Baby Boomers will retire. That?s why, at the executive level, succession planning is vital. This involves planning ahead for the inevitable, and it?s an area where training, teaming and mentorships become an important part of the recruiting strategy.?

1 Occupational Outlook Handbook, US Department of Labor 2002-2003

2 The War for Talent, Organization and Leadership Practice, McKinsey & Company, April 2001

3 An Internal War for Talent, 2005, www.inc.com

4 An Internal War for Talent, 2005, www.inc.com

5 How to Compete in the War for Talent, Carol A Hacker, www.chartcourse.com


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