You want to be the chosen one. You know, the company everyone longs to work for. You want to attract high quality talent.
What’s the price for that?
Some of the largest expenses of any business organization are salaries and employment costs. Every reorganization, downsizing or rightsizing initiative looks at employee costs first. But wait. There is an elephant in the room. A significant cost that is less talked about is the expense of attracting, hiring and retaining the best talent. In a recent conversation with the senior vice president of human resources for a global public relations firm in San Francisco, she estimated the cost of replacing a vice president-level executive to be about $500,000. Loss of productivity and costs for recruiting, hiring, training, as well as keeping an employee engaged add up and are significant.
There’s your price tag. Hence, it seems logical to invest in talent that is a good fit to begin with. But how do you attract high quality talent that fits your organization? How do you retain that talent? And why should you care? For the long-term viability of your company you can’t afford not to, but here are three simple reasons why you should care about being the employer of choice:
1) Birth rates are falling and talent requirements have changed
The lowest birth rate ever reported for the United States was in 2011 — 12.7 per 1,000 people, according to the Center for Disease Control’s online report in its March issue of Pediatrics. European birth rates are even lower, with the lowest birth rate in Germany at 8.2 births per 1,000 people. So the talent pool is shrinking. In addition, if we have learned anything since the great recession started in 2008, the talent
required for fast-changing technologically advanced companies is shifting significantly. No longer is it sufficient to have graduated from a good university with a sought-after degree. Employers are looking for entrepreneurial-minded, flexible employees who can solve problems that have not even been identified yet. And not everyone is on board with this new mindset. With a shrinking pool of candidates, organizations need to recruit employees in a different way. Coming out of the recession one might think there is plenty of talent out there. However, the game has changed. Organizations need different talent than what seems to be available. It might seem counterintuitive considering new technology advancements, but retaining or hiring older employees might be the way to go. Equally, women, and especially mothers, bring a unique skill set to problem solving. Last time I checked, children don’t come with manuals. Mothers make it up as they go. Just what you need in this new work environment.
2) Society is knowledge based
In “The Age of Discontinuity” (1969), Peter Drucker wrote about a transition from an economy based on material goods to one based on knowledge. I believe we have arrived there. In a knowledge-based society, the employers and employees engage differently, more collaboratively and with more transparency — out of necessity. We need to challenge the assumptions under which employers and employees engage. What will make an employee maximize her potential in a knowledge-based society? And what qualities does she need to bring to succeed? Enthusiasm and the willingness to learn are equally important to existing skill sets.
3) The nature of the workforce is shifting
The environment and sustainability are becoming increasingly important issues for society at large. Resources like water and oil are limited. Natural disasters call for resilience. Terrorism is random and arbitrary. During this time of rapid change, the desire to make the most of every day is prevalent in people’s minds. It behooves employees and companies to share and compromise their finite resources. Well, the same could be said for our government. If you agree with why you should be an employer of choice, it’s time to think about the next step: How do you become the employer of choice? How do you attract high quality talent? According to Gallup’s recent State of the American Workplace report, of the country’s roughly 100 million full-time employees, an alarming 70 million (70%) are either not engaged at work or are actively disengaged. So, when people do change jobs, they are cautious about where to sign on the dotted line. From an employer’s point of view, hiring in a knowledge-based society looks different. One of my CEO clients is in the process of filling a vice president position for research and development. Even after getting everyone’s buy-in, completing negotiations, and obtaining a signed contract, he is still nervous about whether the candidate will come on board.
So what to do? Here are some ideas:
1) Communicate and demonstrate your company culture
Design your organization to excite people’s minds. Every employee wants to come to work and do her best. Unfortunately, too many employees come to work and are hindered by the company culture. It is time to be open to what the employee’s ideas are. Listen to your employees and learn from them. And when you think you have listened, listen again. Give people autonomy to solve problems and allow them to be self-responsible. How do you demonstrate a commitment to your culture? In meetings at online retailer Amazon, for example, an additional chair to resemble the customer having a seat at the table is placed there. The company is very customer focused and this drives the culture. Take a look at your company culture and identify the attractiveness to prospective employees. If you get negative feedback from prospective and current employees, realign based on your culture and values. And no, you as the boss don’t have all the answers. Engaging employees and customers is essential. It is time to engage all of the human resources available.
2) Create a work identity around a cause rather than the company
Ford Motor Company is moving from a traditional automobile manufacturer to a 21st century technology company focused on responsible mobility. Starbucks is moving from a coffee company to being one focused on community. What is your organization’s cause? What are you called to do? Focus your organization on solving a problem rather than on what product it can produce. Become organic and constantly evolving and innovating. Become a collaborative solutions developer. Financial incentives are still important but increasingly employees want to feel that what they do matters. The factory models of paying based on tire output, sales bonuses, or base pay plus stock options are outdated and not sufficient in a knowledge-based economy. Provide incentives based on purpose not performance.
3) Create social good and successfully align all stakeholders
Maybe install a Stakeholder Board rather than a traditional Board of Directors. By having all stakeholders at the table you have a better chance of operating in everyone’s best interest.
Hire diversity of thought because your employees need to deal with unique problems that call for unique solutions. Why would you hire everyone to be just like you? The more diverse your workforce, the better chance you have of coming up with unique solutions. Your employees need to be flexible and adapt easily to change. Hire employees that can work autonomously. They need to own the cause. Focusing your recruiting and engagement process on shared values is key. Social media offers a great avenue for transparency. Increased transparency requires authenticity. The public relations backlash of inauthenticity is costly. In order to be at their best, let employees make decisions. For example, people like different work environments; some like it fast-paced and intense, some need structure, some are great team players and others work better alone. The more people are involved in designing their work environment, identifying the people they work with, crafting the way to engage, and most importantly, helping determine what they want to make a difference in, the more motivated they will be. Welcome to the new normal. This is how you attract high quality talent. This is how you earn leadership every day.
This is how you become the employer of choice.