Winning the War: The Mandate for Strategic Talent Acquisition

By Rich Kushner, VP of Market Strategy at Select International

In board rooms, on factory floors and throughout seas of cubicles all across the globe, a war is quickly taking shape, one that will undoubtedly redefine how companies do business in the dynamic 21st-century marketplace. A foreshadowing of the war came a decade ago when McKinsey Consulting predicted a development in the business landscape that would later become the most pressing issue facing HR managers today.

It is a war for talent, a fierce competition to find, hire and retain the very best people at a time when supply is shrinking and demand is increasing.
And true to original predictions, this worldwide phenomenon shows no signs of abating, with the increasing shortage of talent affecting all industries and all career paths, both hourly and professional.

A number of far-reaching trends are driving the changes that have manifested as the talent war. Among these trends are three key factors: changing workforce demographics; the expectations of the 21st-century (“Millennial” or “Generation Y”) worker; and emerging global economies.

Select International (www.selectinternational.com), a global provider of human resource assessment solutions and talent acquisition strategies, is working with companies across the globe to address this new set of challenges.

In a highly competitive labor market, identifying, recruiting and retaining talented individuals that best meet your company’s needs (from their skills to their cultural “fit” to their motivation) becomes imperative and more difficult all at once. Given this dilemma, a company’s response to the mounting talent war will become the subject of discussion in every corner of an organization, including the C-suite. It is therefore crucial for organizations to arm themselves with effective talent weapons as the battle heats up. That begins with a better understanding of the dynamics at work.

The Aging American Workforce

In the talent war, the call to arms begins with changing workforce demographics. In labor as everywhere else, demographics is destiny. History proves that societal affluence creates diminished birth rates, and in the West, the continued shift toward smaller families has led to population stagnation. Furthermore, members of the Baby Boom generation (most frequently defined as individuals born between 1945 and 1965) are about to retire in droves. According to U.S. Department of Labor statistics, the next five years will bring a wave of heavy retirement, followed by five years of moderate retirement and then finally five years of light retirement as the last of the Boomers leave the workforce.

The graying of the workforce becomes even more apparent when you consider U.S. Census Bureau projections for population shift by age group. In 2000, 37% of the American population was between 20 and 44 years of age – in other words, in the prime of their working life. An additional 22% were between 45 and 64 years of age – a demographic slice that is either approaching retirement or already retired – while 12% of the population was 65 or older.

As population growth stagnates – and as American life spans lengthen – those numbers are predicted to change. By 2030, the 20 to 44 age group will have shrunk to 32% of the population, while those between 45 and 64 will represent 23%. Most staggering is the projected increase in the number of Americans over age 65. They will represent a full 20% of the population by 2030.

A Generational Shift

Further complicating the demographic shift is a change in attitude among the generations of workers who’ll remain in play over the next few decades.

Today’s youngest generation of workers have attitudes and patterns of behavior that differ markedly from prior generations. No longer content to spend an entire career with one company, Generation Y typically places work-life balance above loyalty and career aspirations.

Connected to employment information and each other, members of this generation are highly mobile and will not hesitate to seek another position elsewhere if that balance is upset or if they are treated poorly. Moreover, they may simply seek a change of scenery every couple of years, moving around the country to experience different cities or industries. Unlike their parents or grandparents, they are not worried about being perceived as job-hoppers and may consider staying with one company to be a sign of laziness or lack of ambition.

Generation Y tends to seek instant gratification; the perks and benefits of a position are important to them, and they’d like to reap the rewards of their employment from day one.

The Changing Global Economy

The economic dominance of the United States, Europe and Japan is beginning to wane as population stagnates in those regions. The massive populations of India and China provide an increasingly large share of the global workforce and, coupled with an increasing embrace of free market capitalism, an increasingly large share of the world's GDP as well.

The last few years have seen strong economic growth across parts of Asia, Latin America, Africa and the former Soviet Bloc, where countries such as the Czech & Slovak Republics and Poland have experienced strong, sustained growth over the last several years, making the war for talent a global issue. This rapid expansion of economic growth in formerly undeveloped portions of the world is perhaps the central development of our era. It has produced an astonishing achievement: the total global economic output from the beginning of recorded history until 1996 was doubled again in only 12 years.

With more wealth distributed around the globe, workers are less willing to migrate for employment.

In fact, even with their large working populations, India and China are feeling the effects of labor competition. According to the Corporate Executive Board, more than half of workers in those two countries have been contacted by poachers, a rate higher than the U.S.

Strategic Talent Acquisition

As the talent war intensifies, the need for long-term, strategic talent acquisition has become paramount. Companies can no longer merely react to yearly and monthly hiring needs. They must learn to plan ahead to deal with the multiple waves of retirement on the horizon and adapt strategies to mitigate the high turnover risk that comes with hiring the newest generation of talent.

In this war, there is no "silver bullet" that will ensure a company succeeds in its efforts to build a productive, sustainable, adaptable workforce capable of meeting and exceeding the organization's goals. Select International consistently imparts to its business partners the reality that achieving victory will only come from devising and implementing a multi-faceted talent acquisition strategy, one that takes short-term and long-term needs into account.

One of the first keys to success is to become an employer of choice. This is a systemic change that requires the cooperation of everyone from the C-suite of executives to the hourly worker. Here are some of the key drivers to becoming an employer of choice:

• Ensure that your organization has a stake in the local community. This includes involvement in charitable or community efforts and the establishment of solid relationships with key local stakeholders.
• Build a workplace culture that values all employees. Each manager in the company should be held responsible for retention rates, and this metric is tied directly to the management style of the individual team leader.
• Develop a hiring process that is able to evaluate candidates to ensure that they are both qualified and the right motivational fit for the company.

Determining a candidate's motivational fit is absolutely essential in all recruitment and retention efforts. Studies show that motivational fit is the single strongest predictor of absenteeism, turnover and overall employee satisfaction. People whose beliefs and value systems are consistent with the organization will feel connected to the company and vested in its success. If they are satisfied in their positions and pleased with their compensation, they will be more productive. Your company will be more productive as well.

Robust, job-specific assessments should be designed to ensure that the candidates for a position possess the necessary core competencies crucial for performing a job function. Some of those core competencies are universal regardless of the position, and any assessment and selection system should take the following competencies into account:

• Does this person display a pleasant demeanor and a willingness or ability to interact in a positive, productive way with others? Can he/she serve effectively as a member of a team?
• Does this person engage in socially acceptable discussion?
• Does he/she avoid acting defensively? Does he/she have a tendency to be confrontational?
• Can this person understand the cause-effect relationship between certain circumstances?
• Does this person have the ability to make a sound, reasonable decision after evaluating various sources of information?
• Can this person find his/her way to the root cause of a problem and solve it?
• Can he/she evaluate risks and opportunities effectively?

Beyond a comprehensive, legally defensible selection and assessment system, succession plans will help companies weather the talent war, ensuring continuity and success as top executives retire. The development and implementation of a succession plan should be at or near the top of every company's priority list.

A comprehensive, competency-based process will help identify, develop and retain top performers, ensuring adequate knowledge transfer for the next generation of workers.

Best practices to consider for a comprehensive approach to succession planning include objective assessment of potential and perceived performance; identification of potential derailers and other development areas; benchmarking against comparable candidates outside the company; and focusing on retention.

A focus on retention will help not only with implementing a succession plan, but also will work to address generational differences when hiring Generation Y employees.

Assisting employees in attaining a positive work-life balance will, as noted earlier, help retain younger workers, as well as those who are raising children, caring for elderly parents, pursing educational opportunities or preparing for retirement.

With proper planning, flexible work schedules can be successfully implemented. Consider alternative arrangements such as job-sharing, flextime or telecommuting. A variety of scheduling options - and a willingness to work with your employees on those options - makes a company attractive to a wide range of talent, and boosts the morale of existing employees.

Engagement is everything for the Millennial Generation. Accustomed to receiving feedback via a host of technologies and social media, the members of this generation want to know their contributions are valued and appreciated. Employers who show appreciation for hard work and who recognize the value of their workers' lives outside the workspace will find it easier to retain top talent.

This is a generation that sends and receives information instantaneously, that communicates effortlessly through high-tech social networks - blogging, sending text messages, exchanging and remixing videos on YouTube or contributing to wikis. In the marketplace of ideas, these Internet destinations are gaining more and more visibility, which means they are more powerful in influencing people's opinions and in affecting the news agenda maintained by mainstream media.

Keeping current employees happy, then, can be one of a company's most effective marketing strategies, as workers praise their employers and spread positive buzz both internally and externally. The converse scenario applies as well; the talk of unhappy employees can negatively affect the company's hiring and retention efforts.

A New Mandate

Now more than ever, quality people are a company's most precious commodity. As the war for talent becomes more apparent and its impact more severe, organizations of all kinds will be compelled to investigate ways to shift their priorities and change their tactics. To win the war, the mandate for employers is to create a talent acquisition strategy and a workplace environment that is focused on hiring and retaining your most valuable assets - your human capital.