The article looks into how to hire and retain the top talent. Specific recommendations are given along with evidence to support the recommendations.
How to hire and retain the top talent
Looking at the current and past publications about hiring talent one can see the herd effect in place. It’s difficult, if not impossible to find a different view on the subject. Most of articles, books and research along with the industry specialists identify a list of skills and attributes that supposedly identifies the best and the brightest. Among them are relevant (or extensive) industry experience, self-starter and entrepreneurial, high ethical standards (especially after ENRON and the like scandals), strong interpersonal and communication skills, managerial and leadership skills, analytical and creative, innovative and, the ability to multitask and work under stress, to name just a few. On their part, companies and Human Resources (HR) departments offer a lengthy list of benefits and perks to attract and make sure that the newly (and expensive) hired talent will stick around for a while before departing for a competitor with all the acquired knowledge. With all these perks and strategies companies are still having troubles attracting and retaining talent, especially with the younger generation.
Individuals just like companies, come with their own package of skills, experiences, values and expectations, to name but a few. While some of these skills and values are acknowledged by some companies, others are ignored. This ignorance from companies’ part forces talented employees to leave for other companies where their skills and values are highly prised while their expectations met. One of the reasons companies are not successful in retaining talent is that organizations fail to meet employee’s expectations. While organizations know very well what they want, they rarely ask or investigate what the new hire wants and expects from the newly acquired job and the company in general.
It’s very common for companies to list in their job description many skills that while are not needed in the present job may be needed in the future. This is especially visible in the IT industry. While hiring someone with extended set of skills and experiences is great (though only a subset is needed to be successful on the job), the reality is that many of these skills are not needed. The hiring company usually mentions to the candidate that all of these skills are relevant to the current position. After a while on the job, the employee finds that his main technical or other skills he or she considers important are not valued in the current position. After a few tries the employee is left with the dilemma, to stay in the current position and slowly loose the skills that he values and worked hard to acquire or just search for another job. It’s not surprising that most of these individuals choose to leave the company.
To attract talent companies promise interesting and rewarding work. Talented people are individuals who get bored quickly and shun away from dull repetitive work. While no work in modern environment is devoid of repetition and dullness, the percentage of creativity tasks to dull one matter considerably to talented individuals. Employers tend to grossly overestimate the creativity requirements over the repetitive and dull once. The bigger the discrepancy the higher the chance that talented employees will leave sooner rather than later. While offering challenging and rewarding work to attract talented employees is not new, the camouflaging of the dull and repetitive work in a creative package is becoming more and more common. The hunt for talent pushes companies to misrepresent job requirements. The misrepresentation of job requirements not only leads to disappointing job environment, low satisfaction and potential leave for other companies, but is also costly. Talent acquisition is expensive. Spending extra financial resources to obtain talent that is not used and will leave sooner than anticipated doesn’t make sense in today’s hypercompetitive environment.
Human Resource departments should create job descriptions that are relevant to the actual task performed. While putting some extra requirements seems like a good idea and may help to attract talented employees, the downside of this practice outweighs the benefits. Don’t get me wrong, I’m not suggesting that hiring talent is not important, on the contrary, it’s paramount for company’s future success. All I’m saying is that there are, and always be many jobs that do not require expensive talent. Jobs that are tedious, repetitive and uncreative should not require the presence of talented individuals, only the necessary skills to complete the job when required.
On the other hand, if companies do believe they need talent (and who doesn’t) but without clear application at the moment, they should not restrict the talented individual to one particular area or business function. In his seminal book Good to Great, Jim Collins (2001) describes how Dick Cooley, Wells Fargo’s CEO in 1970s built one of the most talented management team in the industry by hiring the most outstanding individuals he could get hands on without a specific job in mind. This is a huge difference from what today’s companies do, hiring talent and putting them in a rigid work environment. Finding the right people is not enough; one must also put the right talent in the right job to reap the benefits of outstanding employees. I
ndividuals also look for a purpose in their life. Working for a faceless corporation where one is just a cog in the machine fails to inspire even the most creative ones. Companies who succeed in attracting and keeping talent are the ones with a clear purpose and well defined values that manage to inspire even the least brilliant one. In Built to Last by Jim Collins and Jerry I. Porras (1994) show how highly successful companies established “Big Hairy Audacious Goals” (BHAG) to engage and energize employees. Of course, whether companies manage to have the right BHAG and follow it religiously or fail to create progress and inspire employees is beyond this article. What is important is that companies with the right BHAG do manage to attract and inspire employees. One young and prominent company with a BHAG is Google. Not surprisingly, Google’s mission to “organize the world's information and make it universally accessible and useful” along with its core values and open culture play an important role in attracting talented individuals (Google, 2010). Having right BHAG however doesn’t automatically assure the company will become a magnet for talent. For talented folks to throw their creative geniuses and human energies behind company’s goals, employee’s values and beliefs along with their personal purpose and individual culture must align with company’s purpose, core values and culture. For instance, Philip Morris audacious goal in 1960s was to become the dominant worldwide player of tobacco industry (Collins & Porras, 1994). These kinds of goals will fail to inspire even the most talented individuals.
Today companies use various techniques to make sure that potential candidates fit company’s culture while sharing its purpose, goals and beliefs. While this sounds trivial, the task of filtering individuals with a less than perfect match is not so easy. Past success doesn’t automatically translate into future performance. At the same time, individuals may have different personal purpose and goals for joining the company. And those goals and purpose do not always align with that of the company. For instance, some may join the company to gain some experience, while others to make more money. It’s always questionable when employees leave one company to join a rival and then leave it a few years (or months) later for yet another rival (or start up). This hopping around can cost companies significant financial resources. In 2005 Google was sued by Microsoft for hiring one of its own employs (Perez, 2005). The whole process took more than five months to settle and was very litigious for Google. Four years later, the same employee left Google for a start up (Hof , 2009). It’s difficult to know for sure what Google gained from this transaction however, companies should steer clear from such arrangements and find other ways to attract the most talented.
Lately, more and more companies are relying on professional referrals (both internal and external) for hiring talent. The proliferation of professional and social networking such and as LinkedIn, MySpace, Viadeo and Facebook to name but a few accelerated the referral practice. It only makes sense to give a higher priority to a candidate referred by another talented individual. After all, he or she had been known the person since university. This type of logic may lead to the hiring of wrong people and eventually lead to undesired results of mediocrity and low performance. There is a well established etiquette where bad-mouthing or giving bad referrals to people you barely know is not advised. Also, giving a bad referral in today’s networked environment may come to hunt you back as one never knows how connected that particular individual is. There is also an expectation that for every given referral there should be a payback one day. Thus, it’s very common for companies to get good referrals for most of the individuals. Looking at the sheer number of applicants with outstanding referrals it’s impossible not to question why so many people are referred as being highly talented individuals while the actual number of talented individual is so small. Companies should be aware that it’s dangerous to rely on referrals alone to find talent.Truly talented folks are not eager to give professional referrals to questionable individuals or the ones they haven’t worked in the past with. This is especially true when the referred individual is supposed to work in the same team. While companies should not ignore applicants with outstanding referrals, it should not put much weight on it just because it came from a perceived talented individual.
After all is said and done, what is the best way to hire and keep talent? As research showed, challenging, exciting and rewarding work, freedom of expression, career development, fair pay and appreciation, to name but a few, are important for talent retention. However, this doesn’t seem to help companies retain most talented. According to a recent research, only 50 percent of voluntary turnover was attributed to the job dissatisfaction (Lee, Gerhart, Weller & Trevor, 2008). Unsolic¬ited job offers from competitors, on the other hand, represented a stunningly large part of the sample. Almost 23 present of voluntary turn over was attributed to unsolicited job offers from rivals. This research shows that companies should not blindly focus on one best strategy to retain talent. No one single attribute determines talent turnover. A combination of factors such as job satisfaction, fair pay, organizational culture and an aggressive competition for the talent, to name just a few, represent a better explanations of why talented employees are leaving for seemingly greener pastures.
Collins, J. (2001). Good to Great: Why Some Companies Make the Leap... and Others Don't . NewYork, NY: Harper Business.
Collins, J., & Porras, J. I. (1994). Buitl To Last. New York, NY: HarperCollins Publishers Inc.
Perez, J. C. (2005). Microsoft, Google spar in Kai-Fu Lee case. Computer World. Retrieved July 5, 2010, from http://www.computerworld.com
Hof, R. (2009). Google China head Kai-Fu Lee leaves to start new venture. Bloomberg Businessweek. Retrieved July 5, 2010, from http://www.businessweek.com
Lee, T. H, Gerhart, H., Weller, I. & Trevor, C. (2008). Understanding voluntary turnover: Path-specific job satisfaction Effects and the importance of unsolicited job offers. Academy of Management Journal, 51( 4).
Google (2010). Corporate Information. Retrieved July 5, 2010, from http://www.google.com/corporate/facts.html