The Impending War for Talent

He explained that talent is being looked at by companies in a very different way than it was previously. According to data from the Aberdeen Group, the search for talent has moved to the number two spot in 2008 from the number eight spot in 2004 on the list of concerns for employers.

There are three fundamental drivers for this shift, according to Kushner. The first driver is workforce demographics, which have undergone colossal change over the past decade. Low fertility rates in the large, developed economies of the West are combining with the impending exodus of boomers from the workforce to create a dearth of new applicants.

The second driver is the 21st century worker, personified by generation Y, or the millennials. “Generation Y is a unique generation,” said Kushner. “They’re a bit pampered, a bit spoiled, and have a live and work, work and live paradigm that’s significantly different than the one their grandparents held.” He explained that millennials are more likely to jump jobs, demand more of their employers, and expect more flexibility, making them difficult to retain.

The third driver centres on emerging global economies, as nations once referred to as the Third World come into their own. “We’re undergoing the most rapid economic expansion in human history, and it’s having profound talent implications,” explained Kushner. He described how the past 12 years of global productive output matches the output from time immemorial until 1996, owing largely to emerging economies. This phenomenon is global in nature according to Kushner, and will affect all industries and geographies.

He explained that virtually all executives are now aware of the coming talent shortage, but few know what to do about it. However, a positive result of this shortage is that companies are finally realizing the importance of their people. “People are,” Kushner said, “probably for the first time in history, the most important asset.”

Competing effectively in the new era will require a strategic and integrated approach to talent acquisition, he added. A largely misunderstood aspect of an organization’s recruitment effort is employment branding, or the public perception of what it’s like to work for that organization, particularly with regard to the internet. “Whether or not you’re consciously trying to develop an employee brand, the internet is almost certain to create one for you,” Kushner said, adding that the internet is also the only long-term method of recruitment and retention.

Talent culture is an important aspect to retaining valued employees. “Are you deliberately fostering a culture within your organization that’s going to make your organization a place that people want to come to work, and when they’re there, will they stay?” he asked. Kushner held up Toyota as an example whose culture is described as respect for people plus continuous improvement. “Those two dimensions…tend to make for a happy workforce.”

Finding new avenues of sourcing and recruiting should be a priority for all organizations, and Kushner encourages companies to take a hard look at their practices to see if they have gone beyond contingency-based recruitment into non-traditional areas such as creative advertising techniques, and viral networking. There are now ways to ensure talent availability beyond staffing and contingency processes, said Kushner, including techniques that employ pre-screening and assessment.

There are some companies who feel that as the talent pool dwindles, so should their reliance on web-based applicant acquisition, according to Kushner. Such systems allow companies to manage the pool of talent they are faced with, regardless of the size. He points to the fact that because today’s university graduates are fully wired, companies that fail to reach out to the online community will lose the talent war.

Most organizations are fully aware of where they are currently, and where they would like to be in the future. The difficult part is how to get there. In his view, empirical data is invaluable in this respect. Using both a qualitative and quantitative approach is the most efficient way to address talent acquisition needs.

The qualitative approach consists of an A-level talent access index which models a company’s ability to attract, select and retain top employees. Attraction/selection/attrition indexes determine which characteristics of your company will be attractive to top talent, your firm’s likelihood of identifying optimal employees and its prospects for keeping them. The sum of these indexes is the aggregate access to A-level talent score, which identifies, in terms of return on investment (ROI), the areas where the company is struggling in its talent acquisition efforts.

The quantitative approach directly models the company’s current talent acquisition processes against the optimal approach, and produces calculations of costs for current (vs. optimal) processes, including the hidden cost of poor hires and loss of valuable workers. This approach returns suggestions for clear, ROI-based decision making, and identifies the most pressing problems and the best to areas to allocate immediate resources.

Kushner had a final warning for those who feel that they will be impervious to the shift in the talent pool “The talent shortage is going to affect all industries in all geographies,” he said. “Hopefully we have disabused you of the notion that your company will be free from this.”

To comment on this story, email jody.white@rci.rogers.com.