Are HR ready for the next war for talent
Why HR must prioritize retention over recruiting to win this war.
It was in 1997 when McKinsey Quarterly first introduced us to the idea of a “war for talent”. I’m not crazy to use war as an analogy, but given how sticky the term has been over the past two decades, try to please me in this one instance. In the late 1990s, the idea that talent, rather than other traditional strategic advantages (such as technology, supply chain, scale, brand, etc.) could turn out to be the “Factor X” of organizational success was a fairly progressive notion. Fast forward to today, and globalization (read: offshoring jobs by heart) has only accelerated the U.S. economy fueled by knowledge workers. HR organizations have invested massive sums in creating talent management and learning and development functions to maximize their return on talent.
Human resources professionals across the country (and around the world) are still recovering from a bewildering 13 months of layoffs, forced remote work, workplace and employee safety protocols, employee anger at the unfair treatment of underrepresented minorities and much more. Still, we need to get rid of it and maintain our situational awareness – because yes, right now, even though we may not know it yet, the Second Talent War has begun.
Up to half of employees could quit their jobs if hybrid work arrangements are not provided, and studies show one in four employees plan to quit after the pandemic. Just imagine if this happened to your own organization!
Projections for the economy are very optimistic, which economists say will significantly increase the demand for talent (and if we experience inflation, it will only become more difficult), far exceeding our labor supply. available work. Unlike 1997, employees now have more information at their fingertips, resulting in a job market for salespeople. Changeover costs for employees have never been lower as working remotely has made the process of taking a daytime interview and starting a new role as easy as returning a laptop and receive another in its place. In addition, employers compete for (and poach) employees across the country and around the world, opening up huge career opportunities for employees who are no longer tied to geography.
Employers have often relied on office-based tactics and physical benefits to create a compelling employee experience that succeeds in both engaging and retaining their employees, and few organizations have thoughtfully designed and deployed an experience. hybrid or pure remote employee that is unique and sticky, thus further exposing the risk of employee attrition in this new paradigm.
In 1997, the main way for organizations to win the talent war was to recruit. Turning the sterile, tedious and mechanical practices of the staff age into something compelling involved the deployment of huge amounts of new recruiting technology, a sexy employer branding on websites and social media, an experience of empathetic candidate, data mining and much more.
But this Second Talent War is unlikely to be won on the recruiting front. Much like real world wars between the military, over time technology and other conditions will change the tactics used to win. This time around, it will be difficult to over-recruit the deep-pocketed tech companies that are fueled by mind-blowing venture capital investments, PSPC-based public offerings, an overheated stock market, and a massive shift in spending to the technology. Many of these organizations are even willing to offer insane compensation packages and perks that other low-margin companies could never make viable. And if you’re not one of those flush firms, then trying to win this war by recruiting will be like bringing a knife to a shootout.
Learn about the benefits employers are using to recruit and retain employees at the free virtual health and benefits leadership conference, May 11-13.
So what should we do? The answer is simple, but not easy: We follow the same business practices that make so many of these Software as a Service (SaaS) based companies extremely profitable and valuable: Focus on retention. In these cases, recurring revenue streams rely on maximizing a customer’s lifetime value and ensuring that customers (consumers or other businesses) remain satisfied (which is often measured through the Net Promoter Score) and retain their subscriptions as a cornerstone of their business. model. HR would be well served by choosing to reframe their employees as talented clients offering their services to the organization, with the goal of HR being to extend the tenure of valued employees.
That’s why employee retention will need to become the measure of the North Star of HR, a number everyone in the organization is aware of and has a strong focus on. While most midsize and large organizations are going to have a talent acquisition manager, very few will have a talent retention manager, which is a concept that should be explored. Retention is where rubber really meets the road: relationship with managers, career development, fair compensation, culture, DCI, tools / resources, brand / reputation, flexibility and pride in the work they do. And the business case is obvious, as the cost of turnover is often 50% to 200% of a deceased colleague’s annual salary, according to Gallup. HR will need to redouble its efforts on employee experience, making them more focused on what employees want / need, rather than just defining what the organization offers from top to bottom.
I have seen the results of engagement surveys and the results of exit interviews during my days as Senior Vice President of Human Resources and also in my work with countless organizations, and almost without exception, data from each organization indicate that career development is one of the top three drivers of fitness. to provide employees with quality feedback, learning opportunities, managerial relationships, the chance to grow and the feeling that they have a bright future ahead of them in the organization as a cornerstone of the ‘engagement and retention. At PILOT, we often say: “If they don’t grow, they go”. With all of this in mind, HR must work to gradually improve the employee’s perceived value of career development opportunities in the years to come if they are to truly win this Second War for Talent.