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Five-figure signing bonuses, desk-side manicures, free BMWs—these were the glitzy symbols of the corporate recruiting scene last year. A scarcity of top-notch professional talent, combined with a fast-growing economy and a fair amount of media hype, compelled many companies to offer anything and everything to potential candidates just to get them to sign on.
But that was last year. Since then, the picture has shifted somewhat. Companies are a little less frenzied in their pursuit of candidates, and there's certainly less pressure to offer boffo compensation packages. Even so, the power still resides with the employee, not the employer. People are more mobile, the labor market is more efficient, and job candidates have more options than ever before. Most important, the need for highly skilled people remains at an all-time high.
The solution? Create a strong leadership core, and rely on a large, fluid, and flexible talent pool to get the work done. This represents a new paradigm, one that requires a major shift in how you think about your workforce—and your job. Companies that fail to recognize this shift, caution the recruiting experts we spoke with, will become casualties in the war for talent.
Staffing the work, not the jobs
In periods of rapid change, the news isn't always good, says Bruce Tulgan, president of New Haven, Conn.-based RainmakerThinking and author of Winning the Talent Wars. "What defines the free market for talent is ups and downs, rapidly emerging market opportunities, and just as quickly disappearing market opportunities. The real challenge, when it comes to recruiting, is staffing up exactly as much as you need to, exactly in the skill areas where you need to, and remaining lean everywhere else."
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| What separated the high-performing firms from the low-performing ones was the attitude toward recruiting. | |
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The waves of downsizing, restructuring, and reengineering that occurred in the early 1990s signaled the end of the long-term model of employment. But as the economy began to improve, companies started to think that being lean wasn't so important. That was a mistake, says Tulgan. "Companies need to be lean and flexible. And that means focusing on retaining a strong core group. You don't have to worry if your core group is getting smaller and smaller, as long as your fluid talent pool is getting bigger and bigger, and as long as you have the skills and systems to manage a fluid talent pool."
Many employers already have a fluid talent pool: they outsource, they use temp agencies, and they bring in consultants—all on an as-needed basis. But they need to do a better job of managing these pools, says Tulgan, listing two recommendations:
- Make sure that your talent pool is wide and deep. After all, the first person you call to take on a project may not be available right when you need him.
- Develop a system for organizing talent according to skill and performance ability. Start out with the assumption that you're hiring a person to complete a particular piece of work. After all, very few people these days see themselves as long-term employees of a company—and those who do may work part-time, telecommute, work flexible hours, or take a year's sabbatical and then come back. But since these people aren't necessarily sitting in the office next door all the time, you need new ways of keeping track of them. Create a database that contains detailed information about occasional or potential workers' skills, track record, and contact information. Then, when projects need additional staff, you can fill the gaps using these external sources. An excellent, though often overlooked, way of building this talent pool is to keep track of outstanding former employees. Instead of letting people leave the company altogether, advises Tulgan, "put them in a reserve army, and call them back when you need them."
Wanted: a new kind of manager
Today's fluid talent pool puts new pressures on managers. It's a much greater challenge to create a high-performing unit out of part-timers, flex-timers, and virtual employees—as highly skilled as they may be—than it is with a workforce of full-time employees, all of whom are located in the same place. Not all managers can cope with the accompanying diversity and uncertainty. Exacerbating the problem is the fact that the prime pool of managerial candidates entering executive ranks (the number of people age 35-44) is expected to decline 15 percent over the next fifteen years.
So how do you find managers who are up to these new challenges? War for Talent 2000, a recent study by McKinsey & Co., suggests that the answer may not lie in your formal recruiting process. According to Toronto-based Helen Handfield-Jones, a coauthor of this study of fifty-six companies, what separated the high-performing firms from the low-performing ones was the attitude toward recruiting. Leaders in the high-performing companies took recruitment personally. In concrete terms, says Handfield-Jones, that means "taking the time to get deeply involved in people decisions and setting the involvement standard for others in the company." Some additional advice for how to pull this off:
- Hunt for talent all the time. You always want to have talented people in the pipeline, says Tulgan. "We are seeing a lot of managers who are constantly recruiting—they have a number of people who have gone through the recruiting process at any given time, so they can hire much more quickly." Handfield-Jones agrees: "The process needs to be more talent-centric than position-centric."
- Conduct broader, more imaginative searches. "You used to be able to go to the same five schools, or you recruited only people from the same industry," says Handfield-Jones. "But today these pools are overtapped—you're not going to find enough of the right kind of people if you limit yourself to a small number of traditional sources." Break out of the traditional mold by looking for people who have different educational backgrounds and who hail from different industries and countries. Similarly, don't get caught in the traditional trap of waiting for active job seekers to find you—these days, you need to do the hunting.
- It's no surprise that the Internet can be an invaluable tool here: some 2.5 million resumes are posted on an estimated 100,000 job-related sites across the Web. But if you're looking for the more hidden sources of managerial talent, firms such as Advanced Internet Recruiting Strategies in Hanover, New Hampshire, can teach you how to locate pages on a company's Web site that can't be accessed through the home page. Containing a company directory, or the names of people working on a hot new project, such pages can be a gold mine.
- Treat job candidates like customers. Today's hiring process, writes Peter Cappelli in a recent Harvard Business Review, is virtually indistinguishable from the marketing process. "Job candidates today need to be approached in much the same way as prospective customers: carefully identified and targeted, attracted to the company and its brand, and then sold on the job." From the first contact to the offer, the process must be fast and pleasant. In addition to screening and ensuring a good fit—the traditional hiring tasks—you need to be selling every step of the way. And just as you would go a long way to keep one of your most loyal customers, you need to be willing to bend your compensation policies, if necessary, to attract managers capable of wringing extraordinary performance out of a constantly shifting workforce.
"In the information age, talent is critical to value creation, and great talent has a much bigger impact than even average talent," says Handfield-Jones. The deep structural forces that are causing this war for talent will only grow stronger over the next ten to twenty years. And the conditions that have created today's fluid talent pool will also remain for the foreseeable future.
In short, it's never been more important to have good talent, but managing good talent has never been more complicated. Which is why finding the right people to manage that talent has never been more crucial.
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