Talent makes the rules now
By: Samantha Crous
Pervading local macro-economic issues, such as higher interest rates, fuel price hikes, inflation, political uncertainty and crime, will affect organisational staff attraction and retention in 2008 and beyond.
But South Africa is not alone. In Western economies such as Europe and North America, as well as other economies, wobbly credit markets, high energy prices and expectations of rising inflation over the next six months all appear to be impacting executive hiring decisions, as well as, more importantly, on the employment decisions made by top talent across industries.
The McKinsey Global Survey of Business Executives: Economic and hiring outlook: Fourth Quarter 2007 says, "Despite such negative indicators, the ongoing competition for talent is clear from other survey findings: twice as many respondents expect their companies to increase as to shrink their workforce, and training and recruitment is the only area in which respondents say that investments are more likely to rise than to remain the same."
By all accounts, the job market appears rosier for talent than for companies, as tough economic times often see job losses, rather than gains or such fervent competition between companies for top level skills. However, given the current global and local economic climate, there are mounting risks to organisations seeking to attract and retain the best people for available positions.
In an article titled 'Making talent a strategic priority', McKinsey reports a deep concern among business leaders regarding the ongoing euphemistically-phrased 'war for talent'. In November 2007, nearly half the respondents in a Quarterly Global Survey conducted by the company, say they "expect intensifying competition for talent - and the increasingly global nature of that competition - to have a major effect on their companies over the next five years. No other global trend was considered nearly as significant".
On the other hand, and quite conversely, the same article highlights that many companies like to "promote the idea that employees are their biggest source of competitive advantage", yet the reality is somewhat different, explaining that companies are often "unprepared for the challenge of finding, motivating and retaining capable workers as they were a decade ago".
In the given economic and competitive market environment, managing and retaining talent will cost your organisation more (in relative terms). As inflation continues to increase locally and globally, with the cost of living on the rise, employees, particularly the skilled and mobile, will demand more of their employers, or they will look elsewhere...
Indeed, this is the primary risk organisations are currently faced with: when the going gets tough, the tough and talented get going ... to positions that offer more security, better career advancement opportunities and tidy benefits; or they break out on their own - and this movement is typically seen in X AND Y Generation talent (those born after 1970).
Gone are the days of employee/company loyalty to any degree, as talent sees itself as very mobile and in control of the future of their careers, rather than staid and with their career futures dictated to them by any organization, or manager, for that matter.
All indications point to a workforce that is fast becoming more mobile, in more control of their negotiations with potential employers while being more demanding of employers, and to rising costs in managing and retaining talent, with an intensified strategic approach to attracting talent.
Reduce your risk
So, in the light of current conditions, what can you do to mitigate these risks?
Information is power: The first step is gaining access to full knowledge of the competitive market (for talent) just as you would if you were researching the market to launch a new product. In other words, find out what the HR market trends are in managing talent effectively through the HR department:
-What do different pay packages look like in different companies, across different industries?
-How are employees' work-life balance expectations managed across companies?
-What enabling and knowledge sharing technologies are being used and to what benefit to the bottom line and to keeping talent in the organisation?
-How are other companies sourcing their talent and how much is it costing them (what savings can you make)?
-How are social networks, CSI activities and so forth encouraged across companies in different industries, as these social interactions are shown to motivate employee engagement and therefore 'loyalty' to the organisation?
-How involved is the HR Director in the business strategy in different companies compared to yours and what is the impact of this? CRF's BEST Employers(tm) South Africa 2007 research revealed that companies with lower staff and management annual turnover rates have robust employee engagement processes driven by the HR department; and
-Talk to your staff. Conduct the necessary staff surveys to find out how they really feel about the various benefits and HR processes your organisation has in place, and find out exactly how they feel about working for you.
Grow your employer brand: Critically evaluate your organisation's employer brand. You may feel or know that yours is a top notch organisation to work for, but how sure are you that prospective talent knows this and how much credibility does the employer brand have in the market? What are you doing to certify your employer offering in the talent market? How can they recognise you as a choice employer above other companies?
By taking these steps together with your HR department as a strategic input in the process, you'll be in a better position to:
know where your organisation stands in the 'war for talent' by understanding what your organisation offers to employees relative to the market in general;
be able to better understand the needs of your employees because you will know what they know about the employment market;
be in a good position to effectively address areas of concern with employees by either pointing out that their expectations are well above or below the market reality, and also to find the areas of concern in the HR processes linked the employee concerns;
create buy-in from and therefore mobilise your HR department for appropriate action, armed with the necessary information and tools to address areas that need improvement;
build a strong, well-known and visible employer brand that is accredited or certified according to a standard benchmark so prospective talent will come looking for YOU; and
market your employer brand!
This article is written as part of the BEST Employers(tm) South Africa human capital management accreditation and public relations project, now open for participation. For more information call 021 425 0320.
Original article published in the February Edition of HR Future (www.hrfuture.net).
Your copy of the 2007 edition of BEST Employers(tm) South Africa can be purchased from leading newsagents or direct from CRF South Africa on 021 425 0320.