Attracting and Retaining Top Talent: What the Best Expect

Last week I attended the SaaStr Conference in San Francisco.  If you are not familiar, this event attracts about 10,000 attendees from the technology world to hear and learn from some of the industry’s most successful SaaS company founders and leaders.  These are individuals who have had to attract and develop talent in a highly competitive environment—and have succeeded in doing so on their way to building valuable companies.  However, the principles and practices they apply in attracting and retaining top talent are not unique to their industry.  They are what every successful organization does.  So, let’s learn from them, shall we?

Attracting and retaining top talent requires a strategic approach not unlike going after your ideal customer.

First, a reminder about the talent environment that exists for 21st century businesses. 

Five years ago, McKinsey predicted that by 2020 there will be a shortfall of the skilled, educated workers businesses really need, and too many with only high school or vocational training.  That’s around the corner from now.  And that worker deficit is about to produce a war for talent.  (Many business leaders would say they feel like they’re in the midst of that battle already.)

So what does this mean?  At a minimum it means you need to be carefully assessing the roles you have defined for each of your key people.  You’ll also want to identify the skill categories that will need to be filled going forward and what capability “gaps” exist.  The competitive environment of the future will require that people in key positions in an organization work in roles that maximize their unique abilities and relieve them of responsibilities that impede their capacity to have a more meaningful and strategic impact.  Duties and responsibilities that are not within the key skill set of these individuals should be outsourced or filled by another contributor whose distinct proficiencies match that need.  The experience of the business leaders speaking at the SaaStr conference echoed this need. 

In a 2013 HBR article, authors Martin Dewhurst, Bryan Hancock and Diana Ellsworth explained this new emphasis:

In today’s knowledge economy, competitive advantage is increasingly coming from the particular, hard-to-duplicate know-how of a company’s most skilled people: talented (and highly paid) engineers, salespeople, scientists, and other professionals.  The problem is that across the private, public, and social sectors there aren’t enough knowledge workers to go around.  And the situation promises to get worse: Recent research by the McKinsey Global Institute suggests that by 2020 the worldwide shortage of highly skilled, college-educated workers could reach 38 million to 40 million, or 13% of demand.

In response, some firms are taking steps to expand the talent pool—for example, by investing in apprenticeships and other training programs.  But a number of companies are going further: they are redefining the jobs of their experts, transferring some of their tasks to lower-skill people inside or outside their organizations, and outsourcing work that requires scarce skills but is not strategically important.

Such moves aren’t new, of course.  Firms have long been carving off repeatable, transactional work—such as call center services, payroll, or IT support—and either shifting it to lower-cost locations or outsourcing it.  What is new is that companies are now doing this with knowledge-based jobs that are core to the business.   (“Redesigning Knowledge Work,” HBR, January-February 2013, Martin Dewhurst, Bryan Hancock and Diana Ellsworth, 59-64)

Free Webinar What is Phantom Stock & Why Do I Keep Hearing About It? February  28, 2017 Register Now! Space is Limited!

So what should we conclude from these talent trends?  First, companies that wish to gain or maintain a competitive advantage will need to attract and retain catalysts—individuals who can create within an organization that which disrupters will capture if they don’t.  Second, those individuals will need to be able to spend their time on those things that they are “great at”—things that fall within their unique abilities—and transfer to others the tasks requiring scarce skills that don’t impact strategy.  This is particularly important since these people will likely be more highly compensated and the company needs them to be at full throttle in their area of highest effect.  Third, those two factors are leading to a scarcity of talent in the marketplace—a dearth of knowledge workers who can have a meaningful impact on the trajectory of a business.  Why?  Because that is the talent everyone wants—and those people know it; they have leverage. Fourth, that scarcity creates high competition within the talent pool.  As a result, companies need a robust and unique approach to their value proposition to win the talent wars—and thereby continue to compete in the marketplace.

4 Things the Best Expect

Given the environment just described, premier talent knows its worth.  Highly skilled people know they have leverage and are not afraid to exert it.  As a result, there are four key things great people will be looking for if your organization is going to win their hearts and minds.

1. They Expect to Be Courted.  The people you most need in your organization are not going to just walk through the door or even respond to an executive search, necessarily.  They need to be sought out and pursued as you would your most valued customer.  Usually this means you have to start courting now the person or people you’ll need six months to a year from now.  You’ll need to develop a comprehensive awareness of where these people are and what their career trajectory is—and put systems in place to find, track and reach out to these people.  Your recruiting strategy needs to be built like you would a marketing and sales strategy—where you understand everything about the motivations and ambitions of your audience and how your company’s opportunity aligns with them.

2. They Expect to be Compelled by Your Company’s Purpose.  Because the best people have options they want to know that your company is solving a problem in the marketplace that is worth solving.  They want to know that the purpose you serve in the lives of your customers is compelling—and that you have an effective solution.  Beyond that, they want to know that the purpose your business is serving aligns with their own values, intentions and contribution ambitions. 

3. They Expect to be Part of a Team of Leaders.  This means they know they will have a realm of strategic stewardship that works within an operational structure where other leaders are operating similarly.  This is done most effectively in the context of a promise-based management system.  In such an environment, different departments or teams within the company take on either a customer or supplier role, depending on the need of each.  So at one point, your department may assume a supplier role to another department who needs your data or expertise to fulfill a product development deadline, complete a KPI or achieve some other target (which, in that scenario, makes them the customer).  In another instance, those roles may be reversed.  This dynamic appeals to catalysts who recognize that the culture in which they are operating is accelerating their personal and professional development and fulfillment.  It also ensures that the organization’s leaders are constantly thinking not only of the strategic impact of their own roles but also whether they are enabling or impeding other leaders to advance their plans.  This is important to them because they've worked in environments before where operations are so siloed that turf battles emerge and progress is stiffled (perhaps they are considering joining your organization to escape just such a business climate).  Company cultures rooted in a team of leaders approach find it easier to drive the kind of exponential growth premier talent wants to participate in.

4. They Expect a Wealth Multiplier Value Proposition.  The wealth multiplier concept is rooted in a value-sharing philosophy that high performing companies adopt.  In such enterprises, there is a pay philosophy that supports sharing value with those who help create it—but without limits.  In other words, premier talent wants to participate in the upside of company growth in much the same way shareholders do.  This doesn’t necessarily mean they need to have equity participation.  There are a number of different ways to pay people in a manner that links value-sharing to value creation.  If you “court” the talent you’re trying to attract effectively, you will be in tune with the expectations they have in this regard and what it will likely take to frame a financial partnership they will accept.  Don’t be afraid to think “outside the box” in this regard also—and get creative with your offering.

In the end, attracting and retaining top talent is not something you will ever again be able to approach casually.  The demands of the marketplace are only intensifying.  If you expect to compete, you will need to master the new rules of engagement in the escalating war for talent. 

ebookMillennialCTA.pngMillennial eBook

Ready To Get Started?

If you would like to speak with one of VisionLink’s pay strategy experts, click on the “Request a Consultation” button below, or call us at (888) 703 0080.

Request a Consultation