Talent Acquisition in 21st Century-A Big Challenge (Part I)
November 1, 2017
Last week, I was in Rajasthan (One of the largest state in India), traveling from Jaipur to Jodhpur to Udaipur to Bikaner to Kota. It was not a fun trip but I was adding few more head counts on the roll of the company I am working with. I was in Rajasthan for 8 days, 1800+ people walked-in for interviews; 750 actually interviewed and we extended the offer to 107 people. Whether you refer to it as a ‘talent war’, skill shortage, or ’employment seller’s market’, it’s threatening the competitive position of many corporations, and the situation is worsening. Over the next 10 years, the demand for talented people will far exceed the availability of skilled workers – at all levels, and in all industries. Before proceeding further, lets have a look at the following figures:
It is estimated that at least 1/3 of business failures are due to poor hiring decisions and inability to attract and retain the right talent.
The average cost of replacing a manager or professional is 1.5 to 3 times salary.
The cost of working around an under-performer can run as high as six figures
The cost of consistently failing to attract and retain good talent – including declining productivity, morale, culture and reputation – is inestimable.
Each vacant position costs your organization Rs. 60,000 on average. For some management positions, it can easily run into six figures.
Notwithstanding the economic situation of a country which may affect the job market for a time being, many ‘A-players’ who have not had significant opportunities for growth and advancement change jobs, and the fundamental shortage becomes apparent – especially for those companies who have not developed a reputation as ’employer-of-choice’, and who have not developed the capabilities and infrastructure to compete effectively to acquire and retain scarce talent resources.
Getting the best talent, and keeping the talent you have is becoming intensely competitive.
Most corporate officers say that the biggest constraint to pursuing growth opportunities is talent.
Few businesses have adequate talent acquisition, retention and development capabilities –
Acquiring A-players is a both art and science. People who primarily make hiring decisions ‘from the gut’ are rarely consistently successful.
Employer brand identity is increasingly important to compete for talented people who have numerous options. Rebuilding a damaged employer brand often takes years.
New technology such as Internet sourcing has not reduced cycle times nor increased effectiveness
Handing-off to a third party vendor is a transaction, not a process. Organizations that consistently attract players develop an employer-of-choice brand identity, deep capabilities in talent acquisition, retention and development, and the process & infrastructure to support them.
Understanding Talent Acquisition
So what exactly do we mean by the term Talent Acquisition?
Well, just as Customer Acquisition describes the overall strategic process around identifying market sectors, targeting client prospects, running direct marketing campaigns, selling and receiving the order (i.e. acquiring a new customer), so Talent Acquisition involves all the sub-processes around finding, attracting and engaging highly talented individuals into your organization.
Origin of the “Concept” of Talent Acquisition
Let’s take a closer look at the way traditional recruitment is re-emerging as a broader ‘talent acquisition’ concept – An approach that is becoming more and more critical in the ‘War for Talent’. Just exactly how does this differ from ‘plain vanilla’ recruitment? Well, in a considerable number of ways.
First and foremost, ‘talent acquisition’ forms a part of a much broader strategic approach in the corporate quest to gain and sustain a competitive advantage in today’s marketplace. Other aspects include talent development, retention and transition, these are primarily inward facing, whilst the former is outward looking.
The core concept of talent acquisition is to get away from the ‘fill in the box’ thinking to one that is more pro-active and much closer to building the skill sets required to achieve business success. Traditionally, a recruitment need occurs when an individual either leaves or is promoted to another function. That’s when panic can set in, especially if no suitable internal solution is found, a situation that is becoming known as – “under the bus syndrome”. Strong relationship building or networking skills are important here. The key to success in talent acquisition is the unique way that you are able to tap into the ‘top performers’ who are not really looking for another job. They never read the traditional job ads or go to the job boards on the Internet.
Encouraging your own ‘star’ players to identify other outside top performers is an extremely powerful tool that is being used more and more. Corporations are offering a wide range of rewards in order to get these names and then act on them.
Once the talent has been identified, the next stage is to start building on-going relationships and look for that all elusive ‘trigger point’ in someone’s career that would get them to change jobs. This can be a number of things but it is often a negative experience or an outstanding opportunity. Gathering intelligence from their ‘friends’ and from previous market research will help in uncovering exactly what excites top players.
Educating line managers that talent acquisition must also be an every day duty is also a success criterion. Most managers, rightly so, look at hiring only when there is a ‘box’ vacant on a purely transactional basis. Today’s top talent has a very short shelf life; therefore you must have a sense of urgency in bringing them aboard, a job opening or no job opening. This tactic is considered very risky by some managers, but at the end of the day not making an offer the day a ‘top’ performer comes to the job market, you will most certainly loose them. Usually bringing in top management (CEO, CFO, COO, etc.) in the relationship building process helps considerably in influencing the ‘star’ performer.
Money is of course essential in the talent acquisition quest, but it’s not the only element. Many corporations are using traditional job classification and job grading systems in order to remain competitive in the ‘cash compensation’ side. Being able to mould an opportunity and make it exciting will also attract top performers, the notion of “a la carte” job descriptions is becoming more and more adopted as a way of finding the “hot button”, and excite people enough to make the move. Benefits and perks are at the fore here with long-term incentives such as stock options, being widely used. The work/life concept will also have an impact, a lot of corporations talk about this element but not many have fully embraced it. Others look at it from an investment banker perspective and view potential ‘top performers’ as they would any targeted acquisition, some people are even thinking of attributing P/E ratio values to top talent. Just think for one moment at that analogy, the talent marketplace becomes the equivalent of the NASDAQ or DowJones and the attractiveness of top talent will vary according to their performance relative to peers and the value added they can bring. Perhaps in the future you will see talent ‘indexes’ being used.
That will prove to be more and more essential in giving corporations a leading edge and competitive advantage over others. If you have it you will be one of the survivors, if not then a ‘market correction’ may be soon be coming your way.
What is difference between “Recruitment” and “Talent Acquisition”?
One of the most frequently asked questions is “What’s the difference between
‘Recruiting’ and ‘Strategic Talent Acquisition’?”
The easy part of the answer is to define “recruiting”. It is nothing more than filling open positions. It is an entirely tactical event.
The more complex part of the answer is the definition of “Strategic Talent Acquisition”.
Strategic Talent Acquisition takes a long-term view of not only filling positions today, but also using the candidates that come out of a recruiting campaign as a means to fill similar positions in the future.
These future positions may be identifiable today by looking at the succession management plan, or by analyzing the history of attrition for certain positions. This makes it easy to predict that specific openings will occur at a pre-determined period in time.
In the most enlightened cases of Strategic Talent Acquisition, clients will recruit today for positions that do not even exist today but are expected to become available in the future.
Taking the long term strategic approach to talent acquisition has a huge impact on how an approach is made to a candidate. If the approach is purely tactical in nature, all we ask of the prospective candidate is “are you qualified and interested?”
However, if the approach is more strategic in nature, the intent of the call is to go much further, and the conversation becomes more relationship building. The candidate has an opportunity to explain his/her future career aspirations, and the recruiter gathers enough information to determine if there is a potential fit in the client organization. If during a strategic recruiting call the candidate declares that they are both qualified and interested, then the tactical nature of the call has been automatically fulfilled. If, however, the candidate lacks sufficient experience, or the timing for a career move is not propitious, then they become candidates for the future, and all the recruiter has to do is keep in touch until either they become available, or a position with the client organization opens up.
Most of the money spent on Strategic Talent Acquisition would have been spent in a tactical recruiting mandate anyway. The only additional cost is in collecting data on high-potential candidates and then keeping in touch with them until hire is made. The additional cost becomes insignificant compared to the value of hiring top competitive talent over time.
Strategic Talent Acquisition allows us access to a pool of competitive talent that would otherwise have been missed or even worse, ignored.
Clearly the business case for acquiring talent strategically is far more compelling than simply paying to fill positions today. What we are doing is adding a small incremental effort, in exchange for a huge potential reward.
Importance of Talent Acquisition
o Understanding workforce demographics (current and future)
o Identifying economic issues impacting organizational sustainability
o Identifying organizational and cultural issues impacting talent acquisition
o Knowledge of industry trends and emerging issues
Linking Organizational Strategy to HR Strategy
o Understanding the organizational strategy
o Translating the organizational strategy into a HR strategy
o Reviewing key components of the HR strategy
o Identifying talent acquisition and retention issues
Designing and Implementing a Talent Acquisition Strategy
o What is an Employer of Choice?
o Demystifying the generational implications on recruitment
o Reviewing the base elements of a talent acquisition strategy
o Utilizing talent acquisition tools and templates
o Identifying considerations when implementing a talent acquisition strategy
o Learning from best practices
o Analyzing performance metrics (business impacts, financial considerations, etc.)
o What is meant by Strategic Talent Acquisition
o How HR strategy, policies, and practices support and facilitate corporate strategy
o Key design elements required in an HR talent acquisition strategy
o Practical application of a talent acquisition strategy
o Knowledge of emerging trends and best practices in attraction and retention of talent
Talent Acquisition – As A Strategy
Historically organizations have not treated the recruitment process as one of strategic importance, but latterly many are now waking up to the reality that the world has changed dramatically. No more can the organization pick and choose between several great candidates for one position. Several changes in our connected world have tipped the scales in favor of the highly talented individual looking for a new opportunity.
Firstly, of course, there is the Internet. Never before in the history of humankind, has there been such an enabling technology. Candidates can now advertise their desire to change jobs within minutes of making the decision and receive enquires about their talents within hours.
Potentially, it is feasible that a high quality employee of yours, having received the final ‘straw which broke the camels back’ (bad appraisal, inappropriate negative response from boss, extra workload stress etc.) can post their CV/Resume up on a particular jobs board at midday today, receive three interested requests for contact with third party recruiters or headhunters within hours, be interviewed for an outstanding role (at one of your competitors) tomorrow, receive an offer in writing the following day and resign that afternoon (within 2 days). Scary, isn’t it?
But if the Internet has enabled this process for candidates, it has also brought significant advantages for organizations.
Direct access to the candidate market
Now organizations can go direct to the candidate market, thereby cutting the time it takes to find the right people, whilst dramatically reducing their recruitment costs.
However, simply posting up jobs on various jobs boards is not the answer.
Best Practice Process
Instead, based on all the research we have compiled over the last 18 months, we believe that Talent Acquisition needs to be addressed at the most senior levels within all organizations – big or small, public or private. This means that Talent Acquisition needs to fit ‘hand in glove’ with your overall organizational strategy. It needs to have the appropriate level of resources behind it; it needs to be monitored and reported on at all board meetings and it needs to involve many people within the organization who attribute to it the importance that the organization requires.
But don’t despair, given the correct focus we can help ensure that your organization becomes and employer of choice’ in this brave new world.
The realities of today’s demographics have elevated the issue of talent attraction and retention to become a critical leadership concern, receiving significant attention. Given the projected labor market and demographic trends, an organization’s approach to talent acquisition can become a key differentiator and source of competitive advantage. The changing market has revealed that prevailing “one size fits all” HR practices are no longer effective. Organizations must develop specific people strategies for their most critical segments that directly align with and support the business strategy. While individual approaches are customized to the needs of each organization, all approaches are based on key critical success factors. This course focuses on the issues and challenges organizations face in attracting and retaining key talent. While introducing participants to emerging recruitment trends in the industry, this course will also provide participants with a selection of tools and best practices from which to draw as they design their own strategy to win the war for talent.
Interaction with my own friends who are into hiring…from across the globe
Inputs from the Research Team of 07/09 Management Consultants.
Other books referred are:
1. The Talent Management Handbook: Creating Organizational Excellence by Identifying, Developing, and Promoting Your Best People (Hardcover)
by Lance A. Berger, Dorothy R. Berger
2. Recruiting Excellence: An Insider’s Guide to Sourcing Top Talent; by Jeff Grout, Sarah Perrin
3. Ask the Headhunter: Reinventing the Interview to Win the Job; by Nicholas Corcodilos, Nicholas Cordilos
4. Hiring the Best: A Manager’s Guide to Effective Interviewing by Martin Yate
5. Hiring the Best Knowledge Workers, by Techies & Nerds
6. The Secrets & Science of Hiring Technical People by Johanna Rothman