More than any time in the history of the world, Technology (driven by knowledge) and Service Delivery (driven by employee engagement) are the keys for organizational growth, and the foundation for the evolving economy. With this environment, comes a need to place focused emphasis on attracting the best people (read: the RIGHT people) to achieve sustained organizational success.
The value of having the right people in the right seats is that it allow organizations’ to work more efficiently and, to use an overused term, do more with less. The extra effort put forth to complete work that is necessary for your company’s success, but falls outside the normal job description or requirements, can be defined as “discretionary effort”- that effort which goes above and beyond what is minimally required to perform the job. Discretionary Effort is the foundation of, and a measuring stick for, employee engagement. That is, the more engaged an employee is the more likely and willing they are to put in extra effort on behalf of the company’s goals.
HR Leaders, therefore, can strongly impact the organizational success (revenue and profit), by ensuring that employees are motivated and engaged. The first step is discovering and defining what attributes of your workplace drives motivated employees- your employer value proposition. Once you have that in place, it’s necessary to develop an effective strategy to communicate those attributes to develop an emotional connection across the talent life-cycle- candidates, new employees, employees, and exiting employees.
In my experience, and based on research from Gallup, Tower Watson, McKinsey, and others, sustainable organizational success is tied directly to the level of engagement (discretionary effort) of your employees. Companies who do this effectively, are filled with employees who take pride in the work they do, and who are exceedingly willing to actively drive the organization’s overall success- the 110%ers.
Within the labor force in the US, and to a lesser degree the world, there is a confluence of circumstances that cannot be ignored by C-Level leadership, and not relegated solely to the role of HR leaders: a shrinking workforce in key skill sets and demographics, and a decreasing average employee tenure.
One set of circumstances is a cultural shift in employee engagement and loyalty (I shared some thoughts on this on LI and below). While many factors are affecting this and it is unlikely that these circumstances will change in the near future, the reality is that this environment has been created by a cultural shift, and therefore, can plausibly be impacted and redirected by focused efforts to change the culture.
The second set of circumstances, unfortunately, is in fact a fixed issue. According to the US Census, between 2000 and 2020, the population of 35-44 year old employees in the US will decline by 10%- a category that has traditionally been relied on for management and leadership development and succession planning. In the age groups of 15-34 and 45-55, population growth is around 5%, while the experienced end of the spectrum, ages 55-64 is growing by 73%. It’s important to note that this general change in the age of the working population is happening in major economies around the world.*
When strategic leaders look at the convergence of these two major changes in the workforce- while considering that unemployment for critical positions and key skill sets normally fall between 0.0 and 3.0%*- it’s clear that there’s a need to change how organizations plan for and manage talent and the workforce in general.
So… explaining the problem is the easy part. Organizations that are successful in the coming decades, will be those who confront these realities head on, and devise innovative solutions to managing the Talent Lifecycle as it pertains to candidates, new hires, employees, and exiting employees.
Here are my thoughts on the issues facing career mobility, copied from a post I shared on the Employer Branding Group in Linkedin:
The US Bureau of Labor Statistics has been running a longitudinal study since 1979 to look at Number of Jobs Held and Duration of Employment, and your estimates are very accurate. 18-46 year old Americans have an average of 11+ jobs during that time, changing jobs just about every two and a half years. Extrapolated out, it’s safe to estimate that across an employee’s career, they will average around 3.5 years per stop.
Great question, though, on the why, and something I’ve researched heavily. The core factors are pretty evident, and I think have been stated above- lack of pensions combined with portability of 401k plans, increased rate of organizational mergers and acquisitions, and a greater economic uncertainty and lack of stability.
The factors have changed the way we view careers and how we identify paths to success, particularly for the younger workforce. In my parents day, if you switched jobs 4 times in 10 years, there would be concern about your commitment and consistency. Now, if a candidate has only held one job in 10 years, there’s questions about this persons willingness or desire to grow and challenge themselves.
With career mobility no longer frowned upon, and in many cases expected, employees see greater and faster opportunity for promotion and growth through employer change, rather than by staying with their current job. Another factor has been suggested as well, with respect to ownership/leadership expectations.
Changes to the transactional mechanisms and the opening of global markets has lead to greater volatility in stock markets, and with the increase in the rate at which stock value and targets affect corporate compensation, public companies are not only more willing, but also incentivized to “right-size” their workforce more quickly to maintain or achieve those targets. This has impacted worker’s expectation of loyalty from their employer, thus changing their feelings of loyalty to their employer. This is also impacting the business practices of private companies looking forward to IPO’s.
Again, many have written- there are many factors affecting this, and none of which appear to be changing soon. So, the question for employers and recruiters, is how to you attract, select, hire, and manage employees within this landscape. Here are a few thoughts:
Attracting – leverage employer brand related to tenured employee stories, career paths, and long term outlook of the organization to attract people who are looking for those qualities.
Selecting- provide clear career path and specific long-term compensation roadmaps to help candidates envision a long term career with your company from the interview stage. Also, talk with candidates about culture and fit and how those factors impact long-term success for your workforce- this can help weed out those who don’t feel they are a good fit.
Hiring- ensure that your employer brand is both genuine and unique, then communicate and live the brand throughout the onboarding process. Ensure that your new hires experience the workforce as you have illustrated it during pre-hire discussions.
Managing- be aware of the career engagement arc, and implement processes to continue to challenge, reward, and respect your employees appropriately to different stages of their employment with you.
*From Tom Casey, Tim Donahue, and Eric Seubert in their book, Talent Readiness, The Future is Now.
Pundits and experts alike have been vociferous in their acknowledgement that the economic growth leading up to the 2008 Recession was largely unsustainable, going so far as to condemn the governmental and financial leaders of that time for not seeing the writing on the wall. One organization who has been keeping their eyes on the writing has been The Conference Board, which released it’s July 2012 Help Wanted OnLine (HWOL)report today. So, what does the writing say, exactly? That depends on your interpretation of the data, and I would urge you to follow that link and interpret for yourself.
Employment and Online Job Ads
At first glance, you can’t miss the headline- “Online Labor Demand down 153,600 in July”, and you’ll quickly see that while Consumer Confidence is up very slightly, the Measure of CEO Confidence is down sharply along with the other economic trends they capture. As you dig deeper, you’ll find that nearly all significant occupation groups showed a decline in job postings, sparing on Sales opportunities; and that 13 of the 20 Major Metropolitan areas showed a drop in online career opportunities. Again, the first impression here is obvious- companies are posting fewer jobs, and that’s a bad sign for short term economic growth.
The Silver Lining
Further on in this report, and upon deeper examination, there are both positive and curious indicators as well. One positive sign is that nearly all of the largest metropolitan areas have posted substantial growth in online job ads since the end of the recession in June 2009, with more than half showing growth exceeding 100%. Sometimes a longer term lens is required to see sustained growth.
The other positive sign is something I mentioned earlier in this post- the increase in sales-related job postings. Certainly, this should be viewed as a sign that companies believe that there is money to be made in this economy- though whether that growth is driven by business-to-business or direct-to-consumer sales is unclear. That being said, if there is a belief that corporations and/or consumers have the money to spend, then sales will be the engine that drives demand and ultimately growth in production and operations employment.
A Penny for Your Thoughts
In my review of the report this morning, I was struck by the second chart, which I’ve included at the beginning of this article. When examining this chart, I could not help but notice that total employment has grown by just shy of 4,000,000 people during the 28 months since the lowest point in March of 2010, including a current trend of 21 straight months of unbroken growth.
Coincidentally, if you look at the 28 months preceding the peak of total employment in February or March of 2008, you’l find that total employment grew a little over 3,500,000 people. Here’s where I need some help- if growth prior to the recession over two-plus years was dictated by unsustainable market conditions, what does that say about the even faster employment growth that we are currently experiencing?
I have been blogging and presenting on the practice of Employment Branding since 2005, and facilitating a group on LinkedIn focused on this subject matter since 2009. This is an area of human resource management that I’m zealously passionate about, and the group has served as an excellent opportunity to connect with and learn from other like-minded professionals who truly believe in the importance and value of making great hires for every opening.
While I have put little to intermittently no effort into promoting or growing the group, there’s been a sustained, if slow, ongoing membership growth particularly since early 2011. As I have lived and worked my whole life based in New England, it’s no surprise that more members are from the Boston area than anywhere else, at 6% of the membership. What I’ve found to be extremely surprising is the growth of membership outside the US. Beyond Boston and Chicago- the top two demographics in this group-, the next largest groups are in New Zealand and Canada, with a good percentage coming from Australia, India, and Russia. What exactly does this mean?
I believe this shows that the idea of globalization is becoming a reality, that organizations across the world are buying into the value and importance of employment branding. Given the development of remote employment opportunities and increasing ease of global mobility and expatriate careers, are US employers now competing directly with Global organizations for talent?
Today’s business climate is forcing a shift in the role HR plays. Instead of providing administrative support, HR is becoming a strategic manager of the organization’s greatest asset – its people. Driven by this shift, the industry is seeing more companies implement integrated talent management processes.
So why has talent management become a strategic imperative for companies?
From there, he goes on to highlight 6 reason why, at that time, he believed that there was renewed focus on Talent Management.
Fast forward 25 months, and Conrad highlights the issues and perils associated with a lack of employee engagement in his post, Employee Engagement & Retention, in which, he writes:
Leaders who want brilliant results from their teams need to make employees feel it’s their company too. How? By making employees part of the decision-making process.
Collaboration is an essential ingredient for creating accountability and ownership. At first, it may take longer to come to a decision when pooling a large sea of minds. But implementing decisions in a comprehensive way unfolds much more quickly when everyone is involved from the beginning and is clear on the objectives.
Look Back Over Two Years- What’s Changed?
I think most HR leaders would agree with Conrad’s original post about the need for investment in and attention to talent management, particularly given the culture of job loss and growing unemployment in the spring of 2010 when it was written. Over the past two years, I’ve spoken with a number of directors and executive leaders in human resources, and very, very few had the time or resources to focus on strategic talent management. More commonly, leaders in this space were focused on maintaining organizational viability amidst workforce reductions, slashed budgets, and epically low levels of employee engagement.
Here we are two years later, and while the economy has turned – slow job growth has replaced job losses, decreasing unemployment (while still too slow) has replaced spiking unemployment rates- many companies still lack the resources, talent, and time to focus on not just developing their talent management/employee engagement strategy but on implementing change. In today’s environment, there is much more reason to believe that the next two years will be substantially different from the past two. Even with slow growth, employers can expect that to feel the effects of the talent deficit in key roles, the loss of key personnel to delayed retirement, and the latent effects of disengaged employees. In the past two years, what has your organization done to mitigate these impending risks?
Look Ahead Two Years- What Will Change
As companies recalibrate their long term strategy to achieve business goals despite the changing economy, it is evident that talent management and employee engagement are key. Flexible, engaged, employees who take ownership in their company are most likely to support organizational initiatives and changing priorities. The hard questions facing executive leaders across all roles is how to manage the short term costs associated with with these areas to position their organizations for long term success. HR leaders play a critical role in these decisions, and must be able to assemble detailed projections and strategic initiatives; and communicate the importance, value, cost, and return associated with the investments required (and the costs and risks associated with failure to make these investments) to support strategic talent management and employee engagement.