Now, more than ever, companies depend on talent, and talent is scarce. It has become a war, a war to attract talent, a war to retain talent. What’s at stake for companies losing this war? Nothing less than market share, profits, customer loyalty, and long-term viability.
The slowing pace of economic growth in no way negates the forecasted long-term shortage of talent. Companies downsizing may be doing so at a high cost. Not only losing the executive leadership and high-potential input needed to steer organizations through what is turning out to be the slowest economy since 2002, but also setting themselves up for a future beyond the current slowdown in which the cost of finding and hiring the quality of talent needed to grow will be enormous.
Yes, the current economic slowdown is likely to take its toll, but organizations and their leaders are challenged to think beyond the slowdown. As traditional sources of competitive advantage are disappearing, and it becomes more and more apparent that talent is the key to success, recruiters are challenged to find more creative techniques to attract and retain employees.
What are they up against? A very low unemployment rate, tempting offers by start-up companies, and demanding and less appreciative employees. In addition, it’s becoming increasingly difficult to use incentives such as stock options, and as employee loyalty wanes, high-potentials are leaving companies in record numbers to start their own businesses.
In my last column, I left you with a final thought to contemplate — when deciding to remain in an organization, high-potentials place an increasing premium on the amount and quality of development they receive.
The challenge many organizations face in retaining high-potentials is that their attraction and retention strategies are seriously flawed. These strategies don’t focus on the leader as the crucial factor in attracting and retaining talent. Why not? It’s pretty obvious that people are attracted to, and stay at, great companies where there is great work and they have a great boss. These are issues of leadership!
A Two-Fold Solution to Winning the War for Talent
The war for talent can be won by attacking the issue on two fronts: revamping organizational attraction and retention strategies, and hiring and developing leaders with certain capabilities and characteristics.
- Revamping Organizational Strategies: The first, revamping organization attraction and retention strategies, is pretty straightforward: Make Talent Your Job. This means ensuring corporate strategy is focused on the creation of a high-performance culture, crafting winning value propositions for your talent, recruiting high-potentials strategically, vigorously, and furiously, and growing great leaders from within the company starting from Day One of their employment.
- Leadership Characteristics and Development: So, what capabilities do leaders need to attract and retain talent? And what is the role of leadership development in helping develop those capabilities? First, the “human touch” is paramount to inspiring and retaining top talent. Leaders must be in tune with what motivates people.
Employees highly value honesty, openness, and integrity in their leaders. And according to our research, the following are the top five characteristics of leaders who are great at retaining talent:
- Identifies potential and brings out the best in people.
- Stretches people beyond their previously perceived ability.
- Sets clear expectations and gives honest feedback.
- Is passionate and emotionally engaged.
- Establishes an environment of trust.
With the solution to the employee attraction and retention dilemma boiled down to a straightforward list of five characteristics, why aren’t more leaders more effective? The answer may be that though leaders have the skills and attributes needed, they do not realize the criticality of the issue. Or perhaps the answer is that organizations have not put in place leadership development efforts aimed at helping their executives better attract and retain talent.
A Success Story
Not all companies are neglecting leadership development. A shining star in the quest, Texas Instruments has made talent central to its strategy for winning in the marketplace with the Talent Leadership Boot Camp it created a couple of years ago. The concept of the boot camp is based on the assumption that Great People + Great Work = Great Business Results and Great Rewards. Led and taught by line executives, the program sets the foundation for individual and organizational behavioral change by creating unity and alignment with the company’s Talent Doctrines (the principals underlying TI’s talent strategy.) Aligned team and individual action plans are created — this results in the creation of a winning business talent strategy for each business unit.
Surely a success story, but there remains a great need for each organization to develop its own strategy for leveraging fundamental leadership skills and attracting and retaining talent. This is one war you just can’t afford to lose.