Why We Lost the War for Talent

Over the past 67 months, I’ve asked 117 different Fortune 500 companies and 272 small to mid-sized companies if they’ve finally won the war for talent. Only a handful said yes. Your company is probably on the list — or is at least represented by those that are. Confirming this in a survey this past week (March 20, 2006, USA Today/Gallup poll), 59 percent of managers said that finding and training enough good people to fill current and future requirements was their most pressing problem. Worse, I can’t find one company making the claim that things look like they are going to get better soon. How could this possible be true? Just consider this:

  • We have better technology (at least according to the vendors).
  • Every company has now created an in-house recruiting department to compete with outside search firms.
  • We have better tools — including new job boards, aggregators, referral systems, CRM systems, and artificial-intelligence-based search engines.
  • We have outsourced recruiting and outsourced complete departments.
  • We have converted the employee referral program into an art form.

We could probably add a half-dozen additional initiatives to the list, but the problems I hear today seem no different than the ones I heard five years ago, 10 years ago, and 20 years ago. Based on current economic and workforce trends, I’m going to make the contention that the war for talent has only just begun. Here’s why:

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  • Demographics and the aging workforce. We baby-boomers are starting to retire. The Xs, Ys, and Zs have different work experiences and different attitudes about work than those they’re replacing ó and it’s far less than a 1:1 replacement. Few companies have built this huge demographic shift into their workforce planning models, nor have they addressed the accelerating increase in turnover this shift will cause. Worse still, very few companies even have a comprehensive workforce planning model to plug these assumptions into.
  • China and India. This is where most of the talent is being created ó and they’re not coming to the United States. They’re needed and staying at home. By some reports, these two countries will be producing 10 to 20 times as many scientists and engineers as we are in the United States. Should we partner with India to offset the growth of China as the CIA suggests? The point here is that there are huge global workforce changes taking place right now that need to be addressed to handle future hiring needs. At a tactical level, this will affect how technology is developed, how candidates are recruited, how work is assigned and managed, and even how ads are written.
  • The Internet. The Internet exacerbated the war for talent; it didn’t help win it. It’s now far easier for a top person to find a new job than it is for a company to find a top person. Turnover, once shunned, is now perfectly acceptable.
  • Technology. Among all the major business functions (IT, finance, marketing, sales, operations), HR/recruiting is the least sophisticated user of technology — and the gap is widening.
  • History. The war for talent has been in the headlines for the past 10 years. Lots of money, resources, and effort have been thrown at the problem, yet there are no indications that things are getting better. If history is a guide, there is no reason we should we able to do any better as the circumstances become more complex.

Somehow, we’ll muddle through. Things are never as bad as the pundits forecast. But even if the forecasts are not as bad, I think we can safely say that dramatic change will be the order of the day. There are some things you can do today to get ready for tomorrow. Here are just a few ideas:

  1. Leadership. Some vendor is not going to solve the problem for us. We have to solve it ourselves. This will take leadership. Unfortunately, I don’t see enough leaders being developed, and those who have the potential to take the lead get hammered by some well-meaning bureaucrat, process, or culture ó or we’ve-always-done-it-that-way thinking. But if you’re out there, keep on pushing. Don’t take no for an answer, and be willing to challenge the conventional wisdom. The CW in our space hasn’t proven to be right in the past, so don’t let it stop you.
  2. Become talent-centric. Your advertising, recruiting, interviewing, on-boarding, and management processes must mimic how top talent looks for new career opportunities. Right now, most companies have set up their hiring processes to mimic how average people look for new jobs. There’s a world of difference here. To see how far you need to go here, take a look at your online job descriptions. Take off your company name and ask a top person if he or she would consider the job compelling, or even interesting, as written. If you want to hire more top people, every single job description must shout, “This is a great career opportunity — and here’s why!”
  3. Get C-level executive commitment. It’s more than lip service or some annual statement. It means spending big bucks. It means reviewing the workforce plan quarterly and challenging you on the strategic impact. It means speaking at your diversity day and it means interviewing every top engineering grad because your company truly values the impact of every new hire. It means rewarding managers who hire top talent, and not rewarding those who don’t. This is how you create a culture of hiring top talent. It must be physical, not intellectual.
  4. Reorganize. Should recruiting report to HR? Twenty-five years ago, the IT department reported to finance. It became a much more effective function when it reported to the CEO. How much more effective would recruiting be if it didn’t report to HR?
  5. Change the role of the hiring manager. As a group, hiring managers don’t know what they’re doing when it comes to hiring. Group-think is no think. Consider this: I just spoke to 35 of the top marketing managers at a Fortune 100 company that’s also considered one of the best places to work. Each one thought they were excellent at assessing candidate competency. Yet no one did it the same way and rarely did they agree on candidate competency. This is a double-double Catch-22. Group-think like this is dumb-think and it’s anarchy and it’s not scalable. Here are a few articles to get you started on making the selection decision-making more business-like.
  6. Invest big bucks in the recruiting team. You’ll need to double the size of your department just to get even. But don’t hire recycled recruiters to do the recruiting. All the good recruiters have already been taken, so develop your own instead. Since we want our hiring managers to consider comparable functions and indirect competitors, why not listen to our own advice? Find people who are great on the phone (call centers, CRM-types). Find people who have successfully managed teams and put systems and processes in place. Find people who are good at organizing, planning, and negotiating. Find people who are great at consultative sales, selling ideas, and concepts. Find people who love research. Maybe hire a few consumer-marketing types who know how to advertise and get people to respond. Hire some web analytic types who love to track click rates. But whatever you do, don’t hire more recruiters who consider themselves experts and who are unwilling to try new things. Here’s an online test you can use to evaluate the quality of your recruiters, or yourself.
  7. Become technology-centric. Stop listening to the techno-vendors who are only interested in getting you to sign up for another three-year stint. In order to win the upcoming war for talent, recruiting must become leading-edge users of technology. Recruiting must be able to build solid-use cases for every recruiting process and interface (if you don’t know what this means, talk to your IT department). Technology can solve much of the problems we face, but the recruiting department must learn how to drive the design, not be held hostage to others trying to sell you some sure-fire solution.
  8. Start building a comprehensive workforce planning model. Just do it. A three-year workforce plan at least defines the problem you’re facing. Update it quarterly and track the plan-to-plan changes. These differences are your leading indicators of how things are changing, and their cause. This is how you move from a reactive to an anticipatory recruiting process.
  9. Leadership. Oh, I already said that. But it’s worth saying again, because in the end that’s really what it will take.

Maybe these are just the ramblings of an original baby-boomer who’s getting ready to go off to Starbucks to begin writing that novel I’ve been thinking about. Or maybe I’m just getting tired of crying wolf. Or maybe I’m not crying wolf loudly enough.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).


3 Comments on “Why We Lost the War for Talent

  1. ‘War for Talent’ — sounds like an event with a finite beginning and conclusion. Far from reality.
    Recruiting is definitely NOT an event, but rather a continuous journey that is enabled by a state of mind. Continuity is another factor to success in recruiting that is so often missing. People come and go and with them the ‘corporate knowledge’.
    College athletics is a great example of managers who really know the significance of recruiting to their success. If you cannot recruit with the best on a continuing basis, you will not be a championship contender.
    Strong recruiting engulfs the entire organization not just one department and is a mind set very similar to customer service. It’s a corporate attitude!
    The point — recruiting is continuous and begins at the top of an organization. Yes, LEADERSHIP is the key!

  2. Good article Lou. Timely, valuable, & expertly written. Some people will never ‘get it’, but I’m glad you are still telling it how it is. Kudos!


  3. One of the best articles I have seen in quite a while! The war for talent (though I prefer ‘contest’ to ‘war’), no matter which iteration we choose to believe we are in is, in my estimation, one that will never be ‘won’.

    Why? Because the dynamics of business change. Each new business cycle brings with it differing challenges that need to be addressed by a company’s talent.

    I’d stand up and applaud this article if it wouldn’t cause people to (further) question my sanity.

    Well stated Lou!

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