The War for Talent

July/August 2000

The War for Talent


Most firms are busy. Growing at a double-digit rate. And enjoying double-digit profitability. One of the biggest problems most firms seem to be facing is:

Recruiting and keeping good people.

Here’s some information and advice from Curt Plott, a human-resource planning consultant, that may help.

The developed world has a collapsing birth rate. In the next 15-20 years, we’ll have a 15% drop in the number of available 36-44 year olds, our next firm leaders.

  • Boomers, now aged 36-54, number 76 million.
  • GenXers, now 24-35, number only 41 million.
  • And GenY, now 6-23, number 72 million.

Beginning in 2010 … depending on the Boomers’ retirement age, (which is dropping,) having a cadre of new leaders will become considerably more difficult than it is now. To offset the drop in the labor pool, firms must increase productivity about 2%/year. That means that greater skills will be needed. Here are the most critical factors for winning the “War for Talent” (in an approximate descending order of importance):

1. Strong identity and culture.

The clearer you are about who you are … your firm’s goals, your work ethic, your attitudes and culture, mission … the easier it will be for candidates to see whether or not your firm is the kind of place they’d like to work. You improve your ability to Recruit.

2. Recruit people who fit your culture.

If someone has all the right talent, but the person’s style simply is different that the prevalent character of people who are the core of your firm, the person won’t stay long.

3. Employees must be responsible for their own development.

Firms have had defined, programmed career tracks. When employees got the appropriate training and coaching, they’d move to the next level. Now, it needs to be

You need to take charge of your own development.”

You can provide release time, pay for tuition, and even have in-house training or educational materials available. But employees must initiate action to cause their own development to occur.

4. Integrate manager support and training.

Managers must be held accountable, by your firm, for their employee’s training. They need to be taught to use assessment tools that could help employees see where they may need more help. And they can help spot developmental opportunities. Finally …

5. Provide a development technology infrastructure.

Firms need a formal system for identifying: (1) the competencies needed to do a job well; (2) the avenues by which an employee might develop those competencies; and (3) career opportunities that enable an employee to utilize the new competencies.

Turnover is the most expensive cost you have!

The first two factors improve recruiting. The latter three improve retention. The cost of turnover runs between 1.5 and 5 times the person’s annual salary. And … if an em-ployee leaves, he or she may take three friends! Plus, surveys find a direct correlation between employee retention, client satisfaction, and (with repeat work) profitability!

Why do people leave their jobs?

Surveys of organizations show the following factors, in descending order of importance:

  1. A lousy boss!
  2. Lack of support for development and learning.
  3. Lack of promotion opportunity … soon enough.
  4. Not enough direct feedback from bosses.
  5. Disagree with the firm’s values/culture. (They don’t Walk the talk.”)
  6. Compensation.

In a separate survey of individuals, asked why they stay with a firm, factors were:

  1. “It’s a great firm.” They like the values and culture, it’s well managed, and they have exciting organizational challenges.
  2. “It’s a great job.” They have freedom, autonomy, exciting job challenges, career advancement, and growth.
  3. “Competitive salary.” (However, this reason had half the percent of responses … it was a “distant” third.)

Firms espouse having a “lot of training and development;” few do it well. People value much more than “classes,” for instance. Other major contributors to growth include:

  • Coaching.
    Executive coaching has grown considerably in “Corporate America” but is just beginning in our profession. It is tutorial, with a professional “executive coach.” But … performance improvement seems to more than justify the cost, in just a few months.
  • Mentoring.
    Helping employees find people who can become long-term career mentors. (Most leaders of firms have had one.)
  • Direct Feedback.
    People want to know how they’re seen. But managers rarely get training in how to provide constructive feedback.
  • “Stretch” jobs.
    Assignments must have a challenge. “Meaning” is crucial for GenXers … or they’ll walk away; they’ve had no loyalty since they watched their parents get laid off after 20 dedicated years.

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