How to Win the ‘War for Talent’
by R. Gaines Baty

Most executives agree about the importance of having the right talent in place.  Jim Collins, in Good to Great, talks about getting the right people on the bus (and getting the wrong people off…) as a common strategy of “Great” companies.

Some companies endeavor to apply a ‘best practices’ approach to talent acquisition, development and retention.  Schlumberger, for example (October 10, 2005 BusinessWeek Online), continues aggressive pursuit and development of top talent in both good times and bad.  This has resulted in deep bench strength, and a reputation for the most talented employees in the oilfield services business.  Financial results have been strong, and approximately 80% of top management started at the company right out of school.  Further, attrition of high potential individuals is treated as a ‘catastrophic event’, warranting the same full-blown investigation as a major downtime event on an oil rig. 

Many organizations apply various ‘just in time/ lean & mean’ approaches, which certainly have their advantages.   But obvious downsides include a thin bench and inability to scale when appropriate… when a key defection or promotion occurs, a very painful and expensive vacancy can result in significant opportunity costs.

And of course, we all know of firms for which the ‘people are our greatest asset’ claims are merely rhetoric.

Regardless, few would argue that many US industries are entering, if not well into, a very strong market economy and huge opportunity for growth and prosperity.  Corporate America is spending money again.  The markets for high-level software engineers, management consultants, healthcare/life sciences and many other fields are hot.  This fact accentuates the critical nature of acquiring, developing and retaining the best talent possible.  Many top executives are ‘betting the company,’ not to mention their own careers, on the ability to solve this talent challenge.  Failure will be very costly. 

We are entering what some have described as a “Perfect Storm,” in which acquiring and retaining top-tier talent will be extremely difficult.  Combine the expanding economy and increasing demand with today’s demographics and trends, and a severe talent shortage looms on the horizon.

First, talent is becoming scarcer.  Demographics suggest that the baby-boomers will retire at an increasing rate in the immediate future, with a deficiency of suitable replacements due to sheer lack of numbers in ‘generation X’.  Consultancy  RHR International predicts that the country’s biggest 500 employers anticipate losing half their senior management in the next five to six years (October 10, 2005 BusinessWeek Online).  Additionally, statistics indicate a significant decrease in graduating engineers, scientists, technical specialists, etc.  And as technical functions are placed offshore, much of the foreign talent that has fortified the US technology industries’ prosperity over the last decade will follow.  As Manpower CEO, Jeffrey Joerres, states, “Every body counts.” (October 10, 2005 BusinessWeek Online),

Second, acquisition of talent is more difficult.  The improving economy and job market result in increased demand and increasing competition for that talent.  Both employed and unemployed candidates are evaluating numerous attractive options and often receive multiple offers.  Last year average salaries in high-tech grew by 5.1%.  Mark Zandi, chief economist for Economy.com, states that “the US economy is just now to the point where employees are gaining leverage with their employers” (January 23, 2006 BusinessWeek Online).  Gone are the days that a candidate will accept a ‘lowball’ offer because s/he has no other options.  Potential employers who have long interview or decision processes before making offers are now losing desired candidates to more aggressive and decisive competitors.

Third, retention will prove increasingly challenging.  This demand vs. supply based competition for talent will naturally put pressure on your own top producers as other organizations attempt to upgrade/poach at your expense.  Are these valued and targeted individuals especially receptive because they feel over-burdened and/or under-appreciated…and under-rewarded, as a result of corporate purging/downsizing over the past few years?  It is said that good people join good companies, but quit bad bosses.  A competitor’s attempted (or successful) poaching of your company’s human assets can cause turmoil, distraction, poor morale, and considerable expense, not to mention huge costs related to lost opportunities.

NCAA National Championships are won by consistently recruiting and retaining the best talent for key positions, creating solid game plans, and coaching (or managing) that talent most effectively.  Achieving great things in business is no different. 

Here are several ‘best practices’ recruiting techniques and attitudes that can help win this war for talent:

• Develop a performance profile…define success…specify and prioritize what a person must accomplish to be successful.  What has the person done to indicate that s/he can do these things for you?  This should provide the most important evaluation criteria, along with cultural assessment.  And know that the best performers are not necessarily the best “interviewers.”
• Ensure that you have a strong candidate/talent recruiting pipeline.  If internal resources fall short, a trusted search partner can help. 
• Tighten up the recruiting, evaluation and decision making process.  An organized and crisp process is very impressive to a strong candidate.  And the opposite is especially true!  The experience should be professional, engaging, and challenging, and the candidate should be treated the same as an important customer. Immediate response, prompt interviews and feedback, consistent positive messages and evaluation criteria from all interviewers, followed by decisive action will contribute to a desired positive impression.  Create a compelling (not inhibiting) process to attract the best talent.
• “He who hesitates is lost”.  Candidates’ positive emotional momentum will fade as days and weeks pass, leading strong candidates to be more receptive to firms that “know” he’s the one they want.  Time delays create opportunities for a competitive suitor to beat you to the punch for an all-star.  Remove ‘consensus’ and delayed-decision logjams, and avoid “radio silence”. Today’s market dictates urgency and demonstrated enthusiasm.
• SELL the vision, career opportunity and organization.  Do not assume that a candidate knows the things you know, or that s/he wants to work at your company sight unseen.  Do not treat candidates as commodities.  “Recruited” candidates are usually not ‘looking’, but are receptive to better career opportunities, and must be convinced of the advantages of your offering.  Why would a happily employed person quit a good job, possibly uproot/relocate a family, and come to work for you?
• Recruiting is a team sport.  Stay involved and work closely with your recruiter and/or the candidate’s sponsor to ensure that the vision, challenge and career opportunity are presented accurately and enthusiastically, and that candidate concerns are addressed/resolved.  According to interviewing expert and author of Power Hiring, Lou Adler, “making a good recruiter a partner (not a subordinate) in the hiring process can make productivity soar.”
• Pursue 2-3 good candidates in parallel when possible.  Favored candidates sometimes decide to go in other directions, requiring time-consuming and expensive restarts of the process if a ‘single-candidate approach’ is taken.  Having suitable backups in the wings helps to ensure success in the short run.
• Create a win-win proposition.  Make a good, acceptable offer.  Uncompetitive comp packages make recruiting the best people very difficult.  Lowball offers insult the best executives and frequently result in turndowns.  Don’t let a few thousand dollars stand in the way of attracting the all-star that can make or save you million$. 
• Be flexible.  Each individual is different, has different priorities and issues, and may require a tailored process/pace and/or accommodations after joining the firm.  The willingness to accommodate a top performer’s needs frequently is the key to acquiring and keeping that person.

These approaches must be taken NOW to win this war.  Your organization’s level of success may ultimately depend upon it.

R. Gaines Baty is President of R. Gaines Baty Associates, Inc. (est. 1977), a Dallas-based retained executive search firm.  Mr. Baty, who started his career with IBM Corp., is formerly a two-term President of both the Society of Executive Recruiting Consultants (SERC) and the Dallas Independent Recruiters Group (IRG), and is a well-known author, trainer and practitioner in executive team building, executive evaluation, executive search and career management issues.  Mr. Baty can be reached at gbaty@rgba.com.

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