McKinsey famously coined the expression “War for Talent” years ago to describe the necessity for companies to find and keep the best talent. Those who succeed in this effort have a distinct competitive advantage over those who fail.
The unemployment rate in the U.S. announced early July, 2011 was 9.2%. Despite many efforts to stimulate the economy through government intervention, this rate remains stubbornly high. Companies still enjoy a ‘buyer’s market’ for talent ? or so it seems. Usually in cases where the supply of labor exceeds demand, buyers can be very selective and conservative in terms of compensation and other benefits. Yet progressive companies realize this isn’t so for top talent.
According to a report at the 15th Annual Wharton Leadership Conference, “Leading in a Reset Economy and Uncertain World”, companies are taking top talent from competitors far more aggressively than they have in the past. Prior to 1981, companies hired 10% of the management staff from outside, choosing to develop their own management teams. Now, organizations are hiring 67% of their management talent from outside.
To find and keep the best talent, companies must provide a STORY to keep people ? for instance, what’s their next step, why the company is a great place to work, and why working for the organization is a good use of their time.
The CEO of Vanguard, F. William McNabb, one of the U.S.’ leading financial firms, stated his firm’s strategy to attract and keep talent is 2-fold:
1st, develop and hold leaders accountable for finding, keeping and
motivating top talent.
Vanguard adopted a program called “GREAT” leaders ? they expect all managers to provide their top talent with:
* G rowth
* R ecognition
* E xpectations ? clear and measureable
* A ccessibility ? to management at all times
* T reatment ? “Golden Rule”- treat staff as they would like to be
treated (not as subordinates but as colleagues)
2nd, focus on teamwork
Vanguard emphasizes its work teams do the following -
* Hold each other accountable
* Show Mutual trust
* BE Engaged and Reliable
* Commit to Vision & Mission
Mr. McNabb further commented that the key characteristic of leaders in his organization is the ability to communicate clearly and effectively.
Another speaker at the conference, Jennifer Deal from the Center for Creative Leadership, spoke about the necessity of developing an employment ‘story’ across generations. According to Ms. Deal, there aren’t as many differences between generations as people think. From “Baby Boomers” (born 1946-1964) to“Millennials” (born 1990 to present), they all want the following for a good job:
1) interesting work
2) opportunity to grow and learn and develop
3) supportive manager
4) colleagues they can like and trust
5) leaders who are credible and trustworthy
6) treated with respect
In any ‘buyer’s market’, there’s a temptation to use power and leverage to deploy financial resources in areas outside of human resources ? R&D, marketing, etc.
For instance, U.S. companies have had a buyer’s labor market so they’ve cut staff, frozen compensation and reduced benefits. Even worse, they’ve reduced training budgets for managers and may have been too complacent in identifying their top talent and ensuring these people are given extra care.
The “War for Talent” never ends. Those who ignore the their top talent or the strategies needed to keep them do so at great peril to their competitive advantage.