Tell Me Again: Why would someone really good want to join your company? And how will you keep them for more than a few years? Yes, money does matter.
Better talent is worth fighting for. At senior levels of an organization, the ability to adapt, to make decisions quickly in situations of high uncertainty, and to steer through wrenching change is critical. But at a time when the need for superior talent is increasing, big companies are finding it difficult to attract and retain good people. Executives and experts point to a severe and worsening shortage of the people needed to run divisions and manage critical functions, let alone lead companies. Everyone knows organizations where key jobs go begging, business objectives languish, and compensation packages skyrocket.
You can win the war for talent, but first you must elevate talent management to a burning corporate priority. Then, to attract and retain the people you need, you must create and perpetually refine an employee value proposition: senior management’s answer to why a smart, energetic, ambitious individual would want to come and work with you rather than with the team next door. That done, you must turn your attention to how you are going to recruit great talent, and finally develop, develop, develop!
Make Talent Management A Burning Priority
Superior talent will be tomorrow’s prime source of competitive advantage. Any company seeking to exploit it must instill a talent mindset throughout the organization, starting at the top.
Leaders with a talent mindset share AlliedSignal CEO Larry Bossidy’s conviction that “At the end of the day, we bet on people, not strategies.” They understand why, when Jack Welch met with The Home Depot to share what is distinctive about GE’s approach to managing growth, he took two human resources executives with him. They believe building their bench is a crucial part of their job. “If it’s the most important thing,” says Dick Vague, CEO of First USA, “your calendar reflects it. I have been personally involved in hiring everyone in the top management group, and many three or four levels below that.”
Creating a winning employee value proposition means tailoring a company’s “brand” and “products”—the jobs it has to offer—to appeal to the specific people it wants to find and keep. It also means paying what it takes to attract and retain strong performers (the “price”). A company’s “brand” is the face it presents to the world. At its heart must be an appealing culture and inspiring values: qualities that apply to every activity and function within the company, and to every aspect of its behavior.
If we carry our analogy with marketing a step further, the executive talent pool can be segmented into four groups. All care deeply about culture, values, and autonomy, but each differs in what it looks for in a company:
“Go with a winner” executives seek growth and advancement in a highly successful company; they are less concerned with its mission and location. This cluster most closely mirrors the overall “top 200” population.
“Big risk, big reward” executives value compensation and career advancement over their company’s success or its active role in their personal development.
“Save the world” executives demand an inspiring mission and exciting challenges, and care less about compensation and personal development.
“Lifestyle” executives are more interested in flexibility with respect to lifestyle choices, geographic location, and compatibility with the boss than in company growth and excitement.
We found that successful organizations tend to have a dominant talent segment, while their weaker peers have a bit of everything. But no company can be all things to all people. Ideally, a company should simply figure out who it is aiming for, and make sure its brand is tailored to the talent segment it seeks to attract.
No brand can be transformed overnight, however. It’s an enormous task, and to be undertaken only in the most extreme situations, although the excitement generated by a turnaround can itself be a powerful component of a new employee value proposition. Arthur Martinez’s commitment to shaking up Sears, for example, transformed perhaps the United States’ most traditional retailer into “a compelling place for employees, customers, and investors.”
Sourcing Great Talent
Instilling a new talent mindset and developing a powerful employee value proposition will operate as a compelling advertisement for your company, but they aren’t enough. A robust sourcing strategy is crucial. That means being clear about the kinds of people that are good for your organization, using a range of innovative channels to bring them in, and having a complete organizational commitment to getting the best.
But most companies don’t really know who they want. They must find out, and quickly, or their recruiting programs will be flawed before they even begin. We found that it is relatively straightforward for individual companies to develop detailed profiles of the kind of people they are after by analyzing the background and experience of their current high performers. Once you know what you are looking for, there are a number of routes you can take. Some get what they need largely through acquisitions, which is fine if acquisitions are an intrinsic part of corporate strategy. Some “outsource” by snapping up people they believe are better trained elsewhere. Those who can attract the best college graduates and excel at early development “in source” instead.
Establishing the right mindset, crafting a powerful employee value proposition, sourcing, developing, and retaining talent—it all makes for an enormous challenge. Companies start from many different positions and vary widely in the strength of their existing bench. Some have powerful, sustainable employee value propositions; some cannot even articulate why a talented person should join them. Some companies have a talent-building process but no follow-through; others have no process at all.
There are also different ways of getting going. A company undergoing a turnaround will have to bring in top talent fast to bring about a transformation in its employee value proposition. Companies in less dire straits can work more gradually on refining recruitment, employee value proposition, development, and compensation simultaneously. The key is to start now. The coming war for talent may seem like a crisis, but like any crisis, it’s also an opportunity to seize—or squander.
thanks to McKinsey Quarterly