We know that it is a demographical reality that businesses will face a war for talent in the coming years. Even in the midst of an economic downturn, we see signs that the competition to attract and retain talent is in full force. I spoke with a business owner recently, who said, “The tables have turned. Employees hold all of the cards. It is so hard to find and keep good people. Employees hold the power now.” The battle for talent may be the defining success factor for businesses in the coming decades.
The scarcity of talent already threatens many businesses. I have spoken with top executives who think the impending talent crisis is a myth, based on their priorities and wishful thinking. Oxygen is not an issue unless you don’t have any—and then, it is the only thing that matters. For executives who are in denial, and have not made talent management a priority, it will surely show up on their radar soon enough, perhaps too late.
So what do we know about the talent crisis, and how can we respond? First, we know that in the coming years we will have more jobs than we have people to fill positions. Second, there will be more knowledge worker positions available than there are educated people to fill those positions. Rising tuition costs means that educated employees will enter the workforce with more debt than in previous generations and will expect their employer to compensate them accordingly.
A third aspect of this talent crisis could include generational characteristics that make retaining and engaging talent difficult for out-of-touch managers. Sometimes, generational gaps are overstated and create false boundaries between generational cohorts. But most seasoned managers will tell you that there are real, observable differences between Baby Boomers (ages 44-62) and the younger generations (Gen X & Y, employees under 44 years old). Differences include various levels of respect for authority, technological expertise, collaboration styles, and expectations about work/life balance. These differences can lead even experienced managers to run off some of their best people unwittingly.
How should businesses respond? We understand markets, right? We have to adjust to changes in the market or we will not survive. We can start by looking at the best practices in talent acquisition. Companies like the SAS Institute and Google have made exorbitant employee benefits a critical aspect of their branding strategy, all to attract the best in their industry. But in many industries, it does not take pricey benefits to keep people. Changing your culture and leadership style is an inexpensive way to engage talent.
Providing training is another way to attract and retain employees. Ask your recruiting manager how often potential recruits ask about training opportunities. You may be surprised at how important this is to younger talent. They are committed to continuous improvement, and they want to work somewhere that shares that value, and provides plenty of opportunities for them to improve.
A final recommendation on how to attract and retain talent: Hold your managers accountable for how well they are retaining and engaging the future of your company. If you have managers who are focused exclusively on short-term profitability, without looking out for the future of the business, it will hurt the long-term success of the organization. A balanced scorecard can help with this challenge. Holding managers accountable for business metrics, as well as human capital metrics, is critical.
Whatever strategies make sense for your business, it is imperative for executives to take aggressive steps to attract, retain, engage, and develop their talent.