Tag Archives: talent management

June 1, 2012 · 1:49 pm

Why Small Firms Can Win the Coming Talent War

Key Concept ~ I read an interesting article in the Wall Street Journal the other day that revealed a remarkable level of stupidity being practiced in business.  In the article, “Software Screening Rejects Job Seekers“, Wharton School professor of management and human resources Peter Cappelli shared his insights into the jobs market and the implications today’s hiring procedures have on attracting and recruiting talent.

We’re hearing it all the time now.  Companies are continuously complaining that they can’t find the talent they need to fill open jobs.  Professor Cappelli decided to look into this situation and came up with the following conclusion; “The real culprits are the employers themselves”.  While the recession empowered employers to be exceptionally picky in their selection of job applicants another factor is at play; screening software is now used by major corporations in the hiring process.  Once again we see corporations running to technology to attempt to solve a human-centric challenge…looking out there for the solutions to today’s competitive challenges rather than being a bit more self-reflective and looking within for the answers.  And simply put, it doesn’t work.

In his upcoming book, “Why Good People Can’t Get Jobs”, Professor Cappelli reveals some striking examples of just how dysfunctional the hiring process has become.  One HR executive told him that, just as an experiment, he anonymously applied for an opening in his company.  He didn’t get through the computer screening process.  In addition, he witnessed managers piling on requirements to the point that nearly nobody on the planet would meet their expectations.  Another example of the mind-numbing stupidity being played out in corporate hiring environments is a company that received 25,000 applications for a basic engineering job.  The HR department reported that no qualified job seekers applied for the position.  Really?  One engineer reported that he was told that his background was perfect except for one thing; his last title didn’t match the title of the position in the company. A title which was unique to that company.  Worst of all, the vast majority of job seekers never have the opportunity to engage with a human being in the application process.

Now, for many, many years I’ve witnessed the hiring process being driven by risk-aversion.  Companies tend to hire the person that is least likely to fail rather than the one that is most likely to succeed.  It’s the equivalent of playing not to lose, rather than playing to win.  But what we’re seeing now makes that behavior look remarkably progressive.  The professor also points to the need for greater investments in education and training, on the part of the employers, to meet their shifting needs.  The mindful investment in human beings is mission critical in today’s economy.  Organizations must become learning organizations. in order to stay competitive.

While this trend is bad news for job seekers, it is excellent news for small, entrepreneurial firms.  The myopic approach of large companies is missing out on great talent simply because they didn’t formulate their resume with the proper keywords.  This is another example of the Industrial Age mindset still dominating Corporate America.  People are more than their resume.  Character, creativity, inter-personal skills and emotional intelligence are difficult to communicate on a one page resume.  These intangibles, that are proven to be the key drivers of success, are only revealed through relationship.  By meeting, or at the very least, speaking with a potential candidate.

Big companies have long enjoyed intrinsic advantages over smaller competitors.  This remarkable misstep opens the door to a more level playing field.  In the 21st century, talent will be the deciding factor on who wins and who loses.

© 2012, Terry Murray.

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March 5, 2012 · 5:55 pm

Are You Prepared for the Talent Shortage?

Key Concept ~ Competing for talent is always a challenge for small firms.  The competition for talent in the 21st Century is already accelerating.  Entrepreneurial startups may want to rethink how they attract, recruit, and retain talent going foward.

The global staffing firm Manpower Group™ issued their 2011 Global Talent Shortage Survey (Manpower Global Talent Survey 2011 PDF) recently in which they identified that 52% of U.S. firms are struggling to find adequate talent for open positions.  In all of the Americas only Brazil, at 57%, is experiencing a greater shortage of talent than the U.S.  I don’t know about you, but I find this to be quite a sad commentary on the state of competitive fitness in the U.S.  There are few signs the talent shortage is about to abate any time soon.  In fact, most executives are anticipating the opposite; as we continue to move further away from the Great Recession the competition for talent will continue to heat up.

So, what are companies doing in response?  According to the survey, not much. In response to the shortage of talent (particularly for technicians, sales representatives, and skilled trade workers…the top three areas of talent shortfalls) only one out of five companies is increasing their training and educational programs for their associates.  Only 6% are pro-actively working with local schools and educational institutions to help address the skill gap.  More companies (25%) are changing their recruiting strategy than are looking to change, or even evaluate, their approach to how they lead and develop talent.

What was really startling was the perception held by executives as to the level of impact not filling key openings in a timely manner has on stakeholders (customers, investors, associates, etc.).  Only one out of five executives surveyed felt not backfilling a critical, open position has a high impact on constituents.  The survey goes on to identify 43% of executives believe leaving a position open has little impact, no impact, or didn’t know if open positions had any impact whatsoever on stakeholders.  This certainly isn’t the impression I’ve been getting from the research that continues to emerge from companies like McKinsey & Co., Gallup, RogenSi, Martitz Research, and other global consultancies.  The disconnect this points to is nothing short of astounding.  Hopefully, entrepreneurs, who tend to be closer to the front lines of day-to-day business, recognize just how disruptive this can be for the associates that remain onboard.

We collectively seem to have very short memories.  It was just fourteen short years ago when we went through the last severe chase for talent.  I was running a global service business in the biotechnology/pharmaceutical sector for a major corporation at the time.  The dot.com boom was in full swing, and places like the San Francisco Bay Area, a hotbed for both the high tech and biotech industries, had an unemployment rate of around 1%.  Our own customers were aggressively pirating our technicians away from our business.  Technicians that required six months of training and education before they were fully capable of conducting their work within the highly regulated biopharmaceutical industry.  Even if I could find potential technicians worth training, the skyrocketing wage scale and cost of living in the Bay Area created remarkable barriers to backfilling.  It became so severe, we would dispatch technicians from as far away as Mexico City and New Jersey for a week at a time to support our customers in Northern California.

What’s coming next will make that talent shortage pale in comparison.  More than 10,000 Baby Boomers are retiring every day.  This rate of retirement will continue for the next seventeen years!  Workers from the Gen X and Gen Y generations are simultaneously introducing an entirely different set of expectations regarding their careers.  They are far more mobile than their Baby Boomer predecessors.  They expect opportunities for professional development and a greater sense of purposefulness as part of their employment.  They witnessed leagues of loyal Boomers work for corporations for decades only to be callously displaced at the next downturn.  The typical length of engagement for these younger workers, the ones with the adaptive technology skills companies covet so dearly, is around three years.  Perhaps this is part of the reason companies are so hesitant to provide training and employ professional development plans?  I’ll hire it when I need it seems to continue to be the prevailing attitude, unfortunately, it may not be there when you go looking for it.

Many companies are holding fast to their slash and burn harvest mentality.  Of squeezing every bit of value out of fewer and fewer human resources.  Of expecting more and offering less in return.  The survey and research results of the past few years are clearly demonstrating the effect of this on the workforce.  The majority of workers are feeling over-burdened, disengaged, and apathetic towards their employers.  The social contract, one’s whose expectations were forged in the post-WWII era, between employers and employees is broken. Talent holds the cards now, and it will be talent that will renegotiates this relationship going forward.

This creates an opportunistic environment for entrepreneurs.  Create a better working experience, and the talent will very likely find your firm, however small, an attractive alternative to life in corporate settings.  As an example, my first national sales management position was with a small company in Massachusetts.  We were anything but an attractive employer for top, seasoned sales talent.  We were, however, a wonderful place for high potential talent to germinate, get a few years of real, business-to-business sales experience in the life science market, and move on to a top-notch gig with a major company in the sector.  I chose attitude, intelligence, and the desire to grow professionally over experience.  I chose to train my sales team to sell the way I knew, from my own sales experience in the sector, would work.  I knew going in, I had to catch the talent on their ascent, and provide them with the training and experience they needed to get to where they wanted to go.  I knew my place in the career food chain, followed this approach, and the team achieved exceptional results.  Each sales representative I hired was with us for just a little over two years and every one of them went on to six figure sales jobs with their next company.  It was a fair trade-off, everybody won because we had calibrated our expectations accordingly.

As the talent wars continue to flare up, take a step back and look at what you have to offer.  You may be pleasantly surprised by embracing a fresh perspective in what you define as talent and what you need in terms of experience.

© 2012, Terry Murray.

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February 24, 2012 · 7:19 pm

An Entrepreneur’s Key to Attracting and Retaining the Best Talent

Yet another survey, the exact same message!  What is bad news for major corporations, opens the door for entrepreneurial firms to gain a competitive edge by attracting and retaining the best talent available.  The fact of the matter is, the most creative, intrinsically motivated, and engaged talent is also the most mobile.  Corporate environments don’t fit their skin, either.  Don’t believe me?  Take a look at the research that continues to illuminate the leadership crisis in global corporations and the resulting associate disengagement levels.  If you’re mindful in your approach to leadership, strategy, and organizational culture, you could be a magnet for the best and the brightest!

The global consulting firm Six Seconds just published their 2012 Workplace Issues Report, “Insights on the People Side of Performance” and it is yet another significant piece of evidence that a new perspective towards leadership, teams, and organizational culture needs to emerge.  In the report, the three key findings were the need for identifying, hiring, and retaining talent; the thirst of employees for visionary leaders; and the absence of business culture that resonates emotional intelligence.  This report is in total alignment with the previous, recent research conducted by RogenSi, McKinsey & Co.®, The Gallup Company, Maritz Research, peer-reviewed research from Cornell, and the IBM CEO Survey of 2010.   I can’t help but wonder when leadership will get the message and finally move forward to embrace a transformational approach their employees are crying out for in survey after survey?

Talent is the key factor in our modern economy.  Without talent companies cannot create and market innovative products and services.  The key driver of value creation in the 21st century is the commercialization of intellectual property (IP).  The source of IP is human creativity.  Fully engaged, inspired, and creative human beings, working cohesively together, are the raw material of business.  Yet every single survey and research paper I’ve read over the past two years points to the exact same conclusion.  There is a critical leadership crisis in the business world today that has left employees feeling empty, used, and of little value.  Our own firm dug a little deeper into the flood of research and calculated that many firms are lucky to be getting a positive return on investment on approximately half of their payroll.  If Henry Ford had seen a 50% scrap rate on his raw materials how quickly do you think he would have addressed it?  Exactly.  Yet we continue to see transactional leadership continuing with business as usual.

The second key issue that surfaces in this report is the desire of associates to be led by visionary leaders.  People don’t come to work looking to lose.  They want to win, they want to succeed, and they want to feel like their a part of something purposeful and larger than themselves.  This is especially true for Gen Y and Gen X associates.  We can find very clear insights for our human need, our very human nature that is pre-programmed to embrace visionary, transformational leadership by looking at Dr. Jaak Panksepp’s research on Core Mammalian Emotional Systems.  These are constant, hard-wired emotions all mammals share and respond to accordingly.  Create an environment that cultivates fear (which is what transactional leaders do…light on the reward and heavy on the punishment) and you’ll get a very predictable emotional response; disengagement.  Cultivate an atmosphere that encourages seeking (which is what visionary, transformational leaders do) and you’ll also get a very predicable emotional response; engagement.  Engagement is a pre-requisite for creativity, the single most important leadership attribute identified in the IBM Global CEO Survey.  Seeking, our constant impulse to explore and make sense of our environment, is directed and coordinated, to a great degree, by the vision of the business.  We all want to know where we’re going.  Leaders that authentically leverages this core emotion accelerate accretive value creation; the whole is genuinely greater than the sum of its parts.  This isn’t theory, I’ve seen it work first-hand.

The final key issue, the absence of organizational culture that resonates with emotional intelligence, points directly to the solution!  Emotionally intelligent leaders (self-aware, self regulating, socially aware, and relationship driven) cultivate a mindful, engaging organizational culture in which people can flourish.  Unfortunately, that’s not what we’re seeing.  Leaders say one thing, and then their behavior indicates another.  This state of incongruity resonates throughout the organizational culture.  People feel this intensely and choose to go into survival mode, avoid taking any risks, stop creating, and simply try to stay off the radar.  Here’s a quote from a professional that was surveyed by Six Seconds that pretty much says it all, “We have abandoned all leadership training, in large part because upper management was frightened by the gap between information presented and their own leadership practices.”

We’re approaching an inflection point.  A time when the urgency to act will emerge.  For many firms, this sense of awareness will come too late, and they’ll find themselves just another footnote of history.  People misinterpreted Darwin’s theory of evolution.  It isn’t survival of the fittest, it is those that are most adaptive that survive.  We live in a time of accelerating, adaptive challenges and unprecedented volatility.  Transactional leadership, the status quo in corporate, is walking the same path of the Dodo bird.  Smart entrepreneurs recognize this, and leverage it to their competitive advantage.  Create a better culture, and the talent will come to you!

© 2012, Terry Murray.

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