With so many choices available, why would anyone opt to work for your organisation? Domini Stuart provides an update on how to win the war for talent.
Reeling them in – and keeping them
There’s no question that the economic downturn is having an impact on recruitment. Experts are reporting everything from a slight slowdown to a freeze, particularly in larger financial services organisations, while many smaller organisations are thinking twice about hiring permanent full-time staff. But this is little more than a blip on the screen compared to the long-term effects of a shrinking workforce.
“During 2001, 170,000 people entered the workforce,” says Michael Solomon, CEO of Learning Seat, an online training group. “By 2030, the number will have dropped to just 12,500, assuming immigration levels stay the same. We’re not looking at a talent war anymore, but a people war; if you have a pulse and you’re keen enough, we’ll train you.”
When traditional student magnets like Macquarie Bank fail to fill their graduate intake, other businesses start to take notice. Some have been quick to respond by changing the focus of their advertising. Rather than selling their products or services, they’re selling themselves as an employer of choice.
They could be wasting their money. “An employee brand can’t be bought. It has to be built,” says Solomon. “That takes time, and it’s happening all the time. Just think about the five questions that are most likely to be asked when people meet for the first time. What’s your name? What do you do? Where do you work? What are they like to work for? How is work? As far as your brand is concerned, the last two are your moments of truth.”
Critical conversations are not necessarily face-to-face. Thanks to social networking sites such as LinkedIn and Facebook, inside information about a company can spread like wildfire while websites like glassdoor.com provide blisteringly honest accounts from employees of the companies – and the people – they work for.
Sites like these can make unsettling reading, but they also provide an accurate insight into what job seekers are looking for. For some, that will come as a surprise.
“It has become evident in the past couple of years that remuneration is not the major motivating factor in a candidate’s decision to apply for a vacancy,” says Nick Deligiannis, director of specialist recruiter Hays. “Career progression, CSR policies, working environment and flexibility in the workplace are at least as important now.
“We have instances across all types of organisations where standard office hours have been reduced to address work/life balance for a changing marketplace and generation.”
Employees have the power to negotiate greater flexibility and shorter hours because they’re so thin on the ground. The problem, of course, is that because they’re thin on the ground means their employers really need them to be working longer and harder. Almost two thirds of more than 1,000 participants in Vedior’s 2008 Asia Pacific Employment Trends Survey reported that a failure to source the right talent was having a negative impact because their staff were experiencing stress from increased workloads.
When the situation is desperate, it’s tempting to promise the world.“I know of one organisation that promoted itself to potential employees as a lifestyle firm offering work/life balance and family friendly practices,” says Andrew Blunden, managing director of Part Time Professionals. “It was only after commencing employment that staff discovered the only lifestyle rewards were tied to long hours. When they referred to the recruitment literature, they were told that circumstances had changed. Needless to say, staff turnover was very high.”
The need to embrace diversity
Most organisations accept that a diverse workforce makes good sense – at least in principle.
“There appears to be some resistance towards taking an affirmative action towards diversity,” says Deb Loveridge, CEO of recruitment group Vedior. “Many are not actively targeting candidates with a disability, from indigenous backgrounds, non-English speaking backgrounds, parents returning to work or mature-age workers.”
Some employers feel anxious about managing multigenerational staff with widely different attitudes and cultures, but this is not an issue unique to this generation.
“Even in ancient Rome, elder statesmen bemoaned the inadequacies and challenges of the young, and vice versa,” says Blunden. “But, particularly in a period of high employment, companies have to be more tolerant and understanding if they want to avoid high staff turnover. Boards can help this by promoting and advocating a corporate culture that is supportive of these values and behaviours.”
Andrew Banks, director of Talent2, says some baby boomers have yet to acknowledge the need to cater for more than one workforce, and that each one is looking for very different things.
“Your part-time or casual people might want work/life balance or they might be there purely for the money because they’re saving to travel,” he says. “Some full-time people might be after specific experience for their resume. Others might live to work. Directors need to be sure that their company has an Employee Value Proposition (EVP) in place that is effective and up-to-date for all of these different communities.”
The average age of today’s workforce is 37; by 2030 it will be 50. Mature-age workers are one group no employer can afford to ignore. But employing older workers effectively means more than looking past the grey hairs.
“One company with a large call centre was, fairly typically, recruiting young people,” says Solomon. “As many were on a gap year or saving to go overseas, staff turnover was 50 per cent a year.
“We suggested they start recruiting over 55s, employing them for a basic three-day week and rewarding any extra days worked with the equivalent leave without pay. A pattern emerged of six weeks’ full-time work followed by two weeks’ unpaid holiday. It’s so consistent that they can roster around it and turnover has dropped to 10 per cent.”
An open mind is equally important at the opposite end of the scale.
“My own Generation Y people work from 10 till 4, and I admit that’s hard for me to watch,” continues Solomon. “But they go home, do what they have to do, then get on the computer and work again later. When you look at the overall output, you couldn’t find better or more productive staff.”
The confluence of globalisation and high levels of employment has opened up unprecedented opportunities for today’s workers.
“You can work in Japan, Europe, the Middle East – even in the US as the days of a green card being hard to get are over,” says Banks.
“Yes, it means that Australian companies can recruit from around the world, but it also means that our talent is fair game. Already nearly seven per cent of our workforce is overseas.”
Kelly Magowan, director of Six Figures, is seeing many progressive and innovative services and approaches emerging in the US and the UK.
“Unfortunately, Australia is probably two to three years behind,” she says. “Very few Australian businesses are utilising blogging, social networking sites and other new online communication channels and this is a problem when we’re being assessed against international opportunities. We can no longer afford to be late adopters.”
A leading role for directors
Most directors built their careers in a world where employers held the power. Today, the power has shifted. It is vital that directors stay in touch with the demographic and economic factors that are shaping a very different future.
“This change is something directors can’t afford to ignore, particularly when they’re looking for ways to manage today’s downturn,” says Banks. “They need to find a balance between containing overall salary costs and keeping good people. It is their particular responsibility to ensure that, when the market normalises, the overall strength of the company hasn’t been depleted.”
“When you’re under pressure to cut $200,000 from your budget, training has always seemed like an easy target,” says Solomon. “But cutting training could crucify you over the next four to five years. Lose even the most basic training such as conflict resolution and you end up with issues which make the company a lesser place to work. You’d be better off cutting front line marketing. There’s no point in creating a market for your widgets if you don’t have anyone to make or sell them for you.”
Magowan urges directors to be more involved in workforce planning, recruiting a first-class HR and recruitment team and making sure it has the funds, support and opportunities to be innovative and progressive. “You need to take some calculated risks and move with the times,” she says.
Banks believes that the acid test for any board is the quality of its statistics. “You might see yourself as a smart, sophisticated company with good statistics but are you really measuring the things that are most important?” he asks. “For instance, do you know how many offers of employment you’re making that aren’t being accepted? Do you know if that figure varies significantly from division to division? How revealing would that be? If you don’t have data of that quality, you need to get it or employ someone else to get it for you.”
While the issue is complex, its premise is simple – as people become harder to find, every company wants the best to choose their organisation and stay there for many years. The question is: Why should they? Would you?
Keeping high earners
In a recent survey of more than 100 high salary earners, Six Figures found that there were three key drivers associated with changing jobs or career – leadership, career prospects and salary, in that order.
“Calibre of leadership has a major impact on whether your top senior people stay or go,” says director Kelly Magowan. “Unfortunately, it’s an issue that many organisations fail to address.
“High earners are, by nature, very focussed on being challenged. Opportunities for mentoring, moving into new roles across divisions, moving up, business coaching, overseas secondments and so on all help to keep staff engaged. Career progression does not necessarily have to be up – it can be lateral. It’s around providing your executives with stimulating work opportunities.”
Remuneration is increasingly being used as a tool for retention. “At executive level, an award of shares, rights or options is becoming common,” says Guerdon Associates executive director Michael Robinson. “To attract new executives, the total value is generally equal to their current equity, bonus and benefits. However, most of the larger companies require the new employee to be in service for some time before the full value vests.”
Companies are also increasing annual bonuses for excellent performance, but paying a proportion of this as shares or share rights which vest after one, two or three years. This way, the most valuable employees have the largest amount of equity locked away as an incentive to stay put. The danger is that if a company has not performed particularly well, bonuses will be well scrutinised by shareholders.
Effective succession planning can also provide a crucial edge. “Research indicates that internal appointees are more successful in the longer-term than external appointees,” says Robinson. “Also, Australians have yet to acknowledge the value of establishing and nurturing alumni. Good employees who leave may be in a position to return in future, or refer talent to you.”
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