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In 1997 McKinsey’s Steven Hankin coined the phrase “war for talent”. A reference to the overwhelmingly fierce competition between organisations to attract and retain quality, and highly productive talent.
With the skills and experience of baby boomers being lost to retirement, coupled with a short supply of candidates to replace them, companies faced off in the battle for the best.
Fast forward to 2021 and companies are facing a similar battle as they navigate an environment of rapid change, complexity, uncertainty, and mobility constraints in a COVID riddled world.
So, what impact can talent have on business productivity?
Quite a bit it seems… According to the late Steve Jobs, “Hiring the best is your most important task”.
It appears he wasn’t wrong. The correlation between ‘top talent’ and business performance is overwhelmingly apparent, as to is its relationship with complexity.
The McKinsey Global Survey: War for Talent 2000, highlights how important it is to invest in hiring and attracting top talent, particularly for positions with a high complexity.
The survey found that for low complexity roles, hiring top talent resulted in modest productivity gains of around 50%. High complexity positions experienced productivity gains of 125% whilst very high complexity roles experienced a whopping 800% increase in productivity.
Attracting the best… Why is it so hard?
If you are a hiring manager, recruiter, leader, or business owner struggling to find top talent, you are not alone.
The issue it seems is not a new one, with Conference Boards 2016 survey of global CEO’s indicating that failure to attract and retain talent was the number 1 issue on boardroom lips. Since then, little has changed.
The emergence of COVID-19 has compounded the issue. Attracting talent for senior, more complex positions has become increasingly challenging as candidates’ preference stability and certainty over opportunity and change. It’s a case of ‘better the devil you know’.
The reluctance for candidates to ‘move’ during periods of uncertainty is nothing new.
In the wake of the Great Recession there was an over saturation of candidates for entry level positions, whilst the opposite was true for senior, more complex roles where the talented and gainfully employed were less inclined to change employers[1].
Couple this with an estimated 10% shortage of ‘high-skill’ workers in advanced economies[2] and it is fair to say that talent is scarce. Never has it been so important for companies to get it right when it comes to hiring, and those that don’t will soon become the picking ground for companies that have.
What do employers need to do to attract and retain talent?
Employee Value Proposition (EVP) is a term often thrown around as the ‘solve-all’ for attracting and retaining talent. And with just about every company having one, they are seldom meaningful and often fail to deliver on their intended purpose.
That said, getting it right could be your greatest weapon in the pursuit of talent!
According to the 2017 McKinsey and Company article ‘Attracting and retaining the right talent’ most EVP’s fail simply because they are not distinctive, are broadly focused, and are unrealistic.
The article highlights the importance for companies to ‘stand out on one dimension while not ignoring the others’[3] highlighting the fact that most companies will follow a similar process in developing an EVP, consequently arriving at something that is fundamentally the same. Not a winning strategy.
And though it is fine to have an overall EVP, the article promotes the benefits of targeting the 5% that matter most, ensuring companies attract the critical talent needed to drive productivity and performance.
Having an attractive EVP is important, however caution is given to creating an EVP that is misleading and cannot deliver on the promises made. Employees these days can quickly distinguish fact from fiction and will soon become a flight risk if things don’t measure up.
At it’s core the ability to attract talent comes down to being an employer of choice. It is about standing out in a crowd, having a clear purpose, valuing your employees, and giving as much as you take.
Employers of choice… What are we seeing in the South Australian market?
Over the past 12 months Blackman Mansfield has placed over 80 permanent positions within the South Australian market, and throughout that period we received an abundance of candidate feedback with regards to what they see as an employer of choice.
Flexible working arrangements – Candidates are seeking employers who actively promote and are accepting of workplace flexibility. It is a key enabler of gender equality, and it acknowledges the competing priorities of life. It is well documented that flexible working arrangements lead to happier, healthier employees, who are more productive and less likely to leave their employer.
Pay for top talent – It is an unfortunate reality that the best, most suitably qualified candidates don’t always get the job, and often it comes down to dollars. If you want the best, then be prepared to pay for it. It is well documented that that the productivity gains from hiring top talent are considerable, particular for complex positions. Short term savings may lead to long term productivity issues.
Professional Development – Candidates these days are thinking less about the now and more about the future and are seeking companies that promote learning and development. Employers of choice can clearly articulate the likely progression and development opportunities they can offer. Before interviewing, it is important to consider this, as it is an inevitable question a candidate will ask.
Sound recruitment process – Don’t underestimate the importance of the candidate experience during the recruitment process. Employers of choice are quick to respond to candidate applications, they have a clear and defined recruitment process, are decisive, communicate regularly with the candidate, and generally run within specified time periods. Make no mistake, candidates are judging an organisation by how they are treated throughout the recruitment process. It is a case of first impressions…
Written by Mark Elding, Recruitment Consultant at Blackman Mansfield Recruitment.
[1] Attracting and retaining the right talent, McKinsey & Company, 2017
[2] Source: The Conference Board
[3] Attracting and retaining the right talent, McKinsey & Company, 2017
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