Whether it’s hiring, contracting, or training employees, organizations need to design talent strategies with long-term goals in mind.
By Traci McCready
Recently, at a speaking engagement, I asked a room of C-suite executives: “What is your company’s most valuable asset?” Each and every volunteer had the same answer: their people.
One might expect this response given the current market for human capital. Consider these factors:
- Unemployment is at an all-time low.
- Skilled labor pools are ever-shrinking.
- Facing the pressure to attend four-year colleges, fewer and fewer young people opt to pursue apprenticeships in crafts or skilled labor positions.
- Increasingly, people are seeking the flexibility of the gig economy over traditional full-time employment.
Constrained by an ever-diminishing pool of candidates, companies resort to poaching the most coveted and experienced candidates from competitors. While organizations may feel victorious in the short term, everyone loses. The costs to recruit, hire, train, and retain employees become unsustainable as a result of a high-turnover ecosystem -the “trading” of the same employees back and forth.
To support growth, contain costs, and preserve quality, service, and safety, companies need to retool talent management for today’s conditions.
Filling the Gaps
Choice abounds in today’s market, but it need not apply only to potential employees. Companies should closely consider their options when selecting a strategy to fill labor needs, be it buying (recruiting new talent), renting (engaging contract workers), or building (training and developing existing employees). The factors that influence these decisions include:
- workforce needs;
- whether critical performance outcomes like safety or quality are tied to years of experience;
- how much training a given role requires; and
- how readily available qualified candidates are.
Typically, the skill sets with the greatest impact on success and the highest associated risk should be recruited. Hiring these skill sets gives employers maximum influence over outcomes via training and performance management. For example, in industries and roles where safety is critical, it is much preferred to recruit and hire employees that have some established experience and then can be properly trained to strictly adhere to defined guidelines and protocols, as opposed to gambling on contract employees.
Skill sets that are readily available in the market or required only intermittently can be rented or contracted.
Finally, where candidate pools are extremely small and performance needs highly tailored, creating programs to build those skills internally through training and development may be the best solution.
Recruiting for a New Generation
Once a company knows what it needs and how it plans to obtain or build those skills, it can turn to recruiting. The key is finding a candidate that not only fits the experience and skills requirements, but also represents a good match for the company’s value proposition, brand, and culture.
And generation matters. Gone are the baby boomer days where the great majority prioritized pay and stability above all else. Generation X ushered in an era of “working smarter, not harder” and a push for work-life balance. Millennials and Generation Z are taking this a step further, demanding their employers be more socially conscious and share their personal values in addition to providing flexibility and generous parental and vacation policies.
All of these factors mean companies must have a deep understanding of how their value proposition, brand, and culture play into recruiting plans. This will impact where recruiting takes place, what messaging conveys in collateral, and what characteristics candidates should embody in order to constitute fit.
A few questions organizations should ask include:
- What characteristics and values do long-standing high performers embody? How do those translate into characteristics one can observe during recruiting?
- What is the company’s stance on social responsibility? Does the company “give back”?
- Where does the company stand on diversity and inclusion? What steps is the company taking to ensure diverse viewpoints are valued and included?
- What are the company’s policies to support work-life balance (working remotely, paid time-off, and parental leave, etc.)?
- What types of development programs does the company provide (sponsored graduate education, rotational programs, etc.)?
The organizations that will succeed in recruiting -and retaining -top talent will understand and define these components before recruiting begins in earnest or risk losing the best candidates to those that do, either during the recruitment phase or shortly after hiring.
Building a Talent Pipeline
Never to be daunted by a challenge, HR is delivering innovative models to address one of the biggest problems in recruitment today: the shortage of skilled workers.
Lacking a large enough pool of qualified candidates, many companies are building their own pipelines. Different approaches to do this include partnering with unions to develop accelerated apprenticeships for promising candidates, working with universities and accreditation bodies to develop new degree and certificate programs tailored to their needs, or opening their own technical schools with custom curriculums. Programs like these can deliver workers who contribute to a more productive and safe work environment, filling a skills gap and improving retention rates.
Organizations must continually look forward and develop human capital strategies that solve for future needs because attracting the right people, building pipeline partnerships, and establishing training programs cannot be done overnight. This type of planning requires bold leadership from CHROs, but perhaps even more importantly, investment from the organizations for which they work. Organizations get so caught up in trying to solve the urgent skill gap that they don’t plan ahead to win the long game. Solve the issue for today, but also create a strategy that will prevent it five years from now.
Traci McCready is a managing director with Alvarez & Marsal Corporate Performance Improvement.