Now that a new year is upon us, it appears my fellow bloggers have finally accepted that a Talent Crunch is upon us and that an all-out Talent War is about to break out. Just in time too. Even CNN is reporting that employers cannot find the skilled workers they need. (The article quotes Jeff Summer of Deloitte Consulting who says “I’m hearing across the board, across industries, companies indicating they can’t exploit market opportunity because they can’t find people with the right skills” and Mark Vitner of Wachovia who says “With this level of unemployment, the only way they [companies] can find the workers they need is to hire them away from someone else“.)
Over on Spend Matters, Jason lets us know that the talent question is popping up first and foremost in every discussion he has these days and that Supply & Demand Chain Executive just ran a piece bylined by Anne Kohler (The Mpower Group) on talent development, which includes a tactical approach you can use to develop and manage talent within your procurement and supply chain organizations.
Over on Supply Excellence, Tim outlines his five top challenges that supply managers will face in 2007 and one of these challenges is that you will lose your top talent. According to Tim, his personal interactions with supply management executives validates Aberdeen’s finding that recruiting and keeping top talent is the top risk facing CPO’s (Chief Procurement Officers) today.
And over on Eric Jackon’s Breakout Performance blog, he tells us that even highly successful companies are realizing that their continued success depends on being able to select, retain, and motivate great people, but that these companies acknowledge that they don’t really know what to do.
So what can you do? Eric tells us that you that you have to develop sophisticated programs that actually address the problem of keeping your best people and finding more to further accelerate your growth. Tim gets more to the point when he tells you that you have to pay competitively, provide a clear career path, provide ongoing training, and invest in technology and my previous posts in the talent series compile a host of recommendations for you to chew on.
However, by now you’re probably so overwhelmed that you’re wondering Where do I begin?. The first step is keeping your best people. Improving your chances of holding on to your top talent is really a lot easier than you might think. In many cases it comes down to simply ensuring the following three conditions hold true.
- Your pay scales are *very* competitive.
Today’s surveys that tell you that money is not the most important consideration in the minds of today’s top talent are a double edged sword. They are good in that they open your eyes to the fact that money alone will not solve your problems and that having deep pockets no longer guarantees success, but they are bad (very, very, bad) in that they lead executives into a false sense of security that “paying market average” is enough to keep your top talent. They’re right in that if you are paying market average, it’s not likely to be the number one source of disgruntlement (or the problem you need to fix to keep your top people), but they overlook the fact that it is still, more often than not, the top reason your people will go somewhere else. Let’s say market average is believed to be 70K – 80K for a commodities purchasing manager, you’re paying Bob 70K, and Bob’s not complaining (or even asking for a raise). You might think Bob is happy with his salary, Bob, who sees the survey, might think he is relatively happy with his salary, but then Joe comes along from your competition and says “Bob: we desperately need you. We’re prepared to pay you 82K a year.” Do you really think Bob’s going to say “Sorry, I’m happy with my 70K a year” and turn down a 15% raise, especially if his perception of the job offer and overall benefits package is roughly equivalent to what he’s getting now? I don’t think so. Since today’s talent wants more than just money, the surveys are right in that its true that your failure to pay more than your competition is not going to be in your employees top “pet peeves” with their current job, but ultimately wrong in that an offer for significantly more money will not lure them away. (“For 20% more a year, I can buy my own health club membership and add a golf club membership on top.”)
- Every employee has a rewarding job.
This will mean different things to different employees. Some employees will want to be challenged daily. Others will want to feel a continual sense of accomplishment. Some will want a detailed career path. Others will just want security. Make sure every manager in your organization spends time listening to each of his or her reports and working on ways to increase their job satisfaction. Too much paperwork? Invite them to brainstorming sessions. Too many long term projects with no chance to feel a sense of accomplishment on a regular basis? Let them substitute for your resources that normally work on “the little things” when they go on vacation. They don’t feel challenged? Brainstorm a new initiative and let them devote one day a week to it (like Google) and see if it pays off. Get creative. Let’s face it – most surveys agree that the number one factor that keeps an employee on the job is “they like it”. If they like the job, and your pay is ultra-competive, it will be very, very hard for your competition to lure them away. That being said, there’s still one more quality you should have.
- You are generous and creative with benefits.
Let’s face it – everyone wants perks, and many perks are a lot cheaper for you to buy than the employee (especially group plans). The key here is to not offer what you think the employees want, but what they tell you they want (so don’t be afraid to ask!). Of course you need to have the basics covered (health, disability, and life), since it is still the case that most of your employees will want or need these, but beyond that, understand that there might not be an across the board solution. Just because the sales guys want a club membership doesn’t mean engineering will. Just because your your purchasing guys like the gym doesn’t mean finance will.
Create a benefits fund and be prepared to sponsor those activities that significant groups of employees want, and make sure that every time you add a benefit for one group, you add a benefit for another group. Create categories, and let employees manage them. For example, a professional development category and a health category would be a great start. Developers can go to tech conferences, sales and marketing can go to seminars, and your purchasing managers can take training courses and have them partially sponsored by the professional development fund. Some employees can get gym memberships others can get massages and have it sponsored by the health category. Also, be sure to work out corporate discounts for any activity that a significant portion of your employee base wants (if a lot of people want a gym membership, arrange with the local gym for a corporate rate). Help your employees with their personal needs that affect their work life and, in addition, if you are a mid-size company, consider hiring a concierge in HR to do just that. If you are a large company, then you could have a significant number of employees with children who often need help finding daycare. You could maintain a register of local day cares, and if you are large enough, reserve a certain number of slots at the local day care for your employees.
Let’s face it, paying top dollar and making each and every employee’s job rewarding is a great hook and line – since it will be tough for many of your competitors to beat that – but flexible and personalized benefits is the sinker, since this is usually the trio that attracts someone to a job, or causes them to leave it.