After years of relative stability, knowledgeable workers in global organizations have begun to behave like free-agent athletes in professional sports. For the past several years, we have witnessed an increase in the number of individuals deciding to change jobs. The decision to test the market, barter their skills on the open market, and associate with new organizations has senior leaders and human resources executives scrambling for answers. Talented individuals have caused the quit rate, which measures workers’ ability to change jobs, to rise recently, and there’s no indication of a slowdown. According to the U.S. Department of Labor, the quit rate reached a four-year high in September 2005. It seems the American workforce settled down after the events of September 11, 2001. Now, there’s a new game being played. The stakes are very high and could impact our commercial performance globally, and it bodes well for recruiters in the Talent Acquisition Championships.
Consultants in the executive search and recruiting industries believe the new game signals an increase in available jobs. At a recent conference in New York attended by nearly 500 recruiters and senior human resources and corporate diversity leaders, the discussions supported the Labor Department’s report. Representatives from some of the best and biggest business organizations operating in the global economy indicated they are actively seeking ways to retain valuable leaders and management staff. Many of the talent-acquisition strategies employed over the past several years are being reviewed. In fact, retention strategies have shot up the list of priorities at growing companies. The competition for talent exists in nearly all business sectors. Seasoned executives are now open to exploring new opportunities in new communities, as they were in the past to a degree. But what’s different today is that they’re openly talking about their intentions.
This “executive exodus” will impact organizations at all levels. Individuals are giving notice of intent to leave the largest global companies as well as the major regional enterprises. Research indicates that CEOs are very concerned and struggling for answers. Workforce management methods such as diversity and inclusion programs aren’t the answer. Many of the departing leaders are individuals who have benefited from such strategic initiatives over the past decade or more. However, they’re leaving behind fewer strong middle managers that are ready to step into those soon-to-be-vacant positions. What is clear is that the emphasis on promoting diversity and inclusion as a business strategy put a few strong leaders in top positions, only to leave behind a big void in the pipelines of leadership.
To use a sports analogy, big business is now faced with designing and developing a rebuilding program for the next few years. We will see a rush to prepare the next generation leaders and managers for more responsible duties. The question is, are we ready to play in the big leagues, competing on a world stage with a team of high- potential performers?
The thoughtful conversations taking place at conferences indicate that human resources officers will become more critical to organizations than ever. New services must be offered. Finding and attracting the talent is no longer about the compensation. It is about people and how they are treated and valued as partners in the enterprise. This could lead to a transformation in the way search consultants develop and sustain business relationships. In addition to a cyclical and tightening labor market, we are faced with the reality of the approaching retirement of nearly 80 million baby boomers, the oldest of whom reached retirement age last year.
We could be fast approaching the day when the individual will dictate the way such career and personal issues will be handled. Major companies must be proactive in dealing with these issues. It’s suggested that recruitment be linked to recognition, retention, and reinvestment strategies.
It all starts with the talent-acquisition process. Hiring managers must work more closely with the human resources professionals during the entire selection process. We know that this isn’t the case today. We have to understand that what we have to do to get good people isn’t what we have to do to keep them. Likewise, individuals in the talent pool must also accept the fact that what they do to get the job isn’t what they need to do to keep it.
Much of the research on the topic of picking, developing, and keeping people indicates that senior management has gotten the message and is paying more attention to the challenge of keeping good people who have done good work, but plan to move on. Leading executives in major companies have elevated the issue to the strategic business level. Companies need an action plan where individuals are empowered, encouraged, and inspired to engage in thoughtful conversations about their future. This includes personal, academic, and career concerns. Basically, we need to reinvest in our best people to guarantee improved performances throughout the organization.
Engaging talented individuals around self-development strategies requires that we take a non-judgmental attitude, display purposeful expression of feelings, and operate from a controlled emotional environment, while accepting and respecting the person. It seems that the business climate will have to change to one where the development of genuine interpersonal relationships is possible. Companies will find they need to become more accommodating of personal goals and job satisfaction if they want to be part of a talented person’s future.
Recruiting, recognizing, retaining, and reinvesting in good people will be the key source of competitive advantage in the future. World-class people are not everywhere. They’re not born, but can be grown, or can grow themselves if given the opportunity, challenges, and necessary supports. They’re also extremely valuable. We must take responsibility for attracting and retaining them for all of us to be successful. We need to create and sustain an environment in which they can grow at an incredibly productive rate, doing things that nobody, even they themselves, thought they could do. After all, in sports and now in commerce, free agents will always continue to test the water. Creating a workforce culture that makes your company the obvious choice is a winning strategy.
Dr. Herbert Smith is managing director of DHR International, a major executive search firm based in Shaker Heights, OH
Image courtesy of Matt Forsythe