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The war for talent continues ...
Hiring the right person can be tough, keeping them can be tougher

BY: MICHAEL STERN December 3, 2005

It’s been eight years since consulting giant McKinsey & Co. coined the phrase “The War for Talent,” to describe the growing need for companies to attract top management talent if they wish to stay competitive.

That combat metaphor may have resonated in the last days of the tech boom, but the economic slump of 2000-01 knocked most recruiters off their “war” footing. Suddenly there was a surplus of talent – and companies’ biggest problem was not finding skilled executives, but finding worthwhile things for them to do.

But now there is growing evidence that the talent squeeze is back. It’s not so much a war this time, as a way of thinking. Today’s kinder, gentler buzzword is “talent management,” but it still refers to the same thing: employers’ need to position themselves as a suitable home for talented top performers, and devise strategies for not just recruiting them, but motivating, developing and retaining them, too.

War or peace, the 21st century requires employers to make people their priority in a much more active way. As McKinsey put it in a 2001 report, “Successful companies understand that in today’s economy, recruiting must be approached more like marketing and sales than purchasing; the recruit is the customer and the company must sell its jobs in an increasingly competitive marketplace. And these companies measure their recruiting success with the same rigor that they apply to growth targets or market share.”

That’s quite a challenge, but we’re beginning to see it happening. Just in the past year, we’ve seen a remarkable increase in the time and money that Canadian companies are investing in finding and developing talent. As a search consultant, I am naturally delighted to see them pouring more money into executive search. But they are also finding many other ways to attract and nurture talent, from increasing their use of psychological testing to promoting executive coaching & mentoring programs to monitoring employee engagement.

What’s going on? Having patiently spun their wheels through a long period of economic uncertainty, many Canadian businesses are now moving forward with long-delayed expansion programs. CEOs and human-resources execs are telling me that they are investing more now in finding & keeping good people, because they need top talent to see these initiatives through, and because finding qualified, gung-ho people is becoming increasingly difficult.

These days, there’s a new willingness to do whatever’s necessary to ensure the right people come on board. For example, while psychological testing used to be used occasionally, it’s now a standard part of the recruitment process as another way to determine who fits and who doesn’t. This trend is even being embraced by many of our clients in heavy manufacturing and transportation --- not sectors traditionally known for their “touchy feely” approach to human resources. But they see value. And they don’t want to make a mistake.

Furthermore, senior executives are sitting down with the industrial psychologist to discuss the results for each individual candidate – an unusual investment of both cash and personal time. The process is taking them a lot longer, but they are determined to get it right. Putting the wrong person in charge of a key initiative is a mistake that can haunt you a long time.

Companies are also increasingly committed to retaining & developing talent that is already on board through coaching/mentoring programs and by increasing the percentage of employees who are “engaged”.

Hewitt Associates, which conducts the 50 Best Employers in Canada annual study, defines employee engagement as “specific behaviors shown by employees who are truly committed to your company's success and put forth extra effort to help the business succeed”.

To influence business success, employees must be more than “satisfied" with their jobs, says Hewitt. Engaged employees consistently demonstrate three general behaviors: They Say, Stay & Strive.

Say -- The employee consistently speaks positively about the organization to coworkers, potential employees, and customers.

Stay -- The employee has an intense desire to be a member of the organization despite opportunities to work elsewhere.

Strive -- The employee exerts extra time, effort, and initiative to contribute to business success.

It’s well known that one of the main reasons employees seek other jobs is because they feel out of the loop, undervalued and unappreciated. They feel their opinions don’t count. Employee engagement surveys are not development tools per se, but they certainly indicate what percentage of the employees might be tempted to respond when the headhunter calls and what the company must do to motivate and retain its key performers.

These developments clearly point to a trend: increasing recognition in corporate Canada that hiring the right person can be tough, but that keeping them can be tougher. Employers have to pay more attention to orienting new people, developing their skills and managing their careers, if they hope to retain top talent at a time when so many other employers are desperate for help.

Because losing good people is bad business.