In a landmark 1998 study called The War for Talent, published in the McKinsey Quarterly, the authors led with the statement “Better Talent Is Worth Fighting For.” Today, even more than in 1998, the need for superior talent is increasing. US companies are finding it difficult to attract and retain good people. Executives and experts point to a severe and worsening shortage of the people needed to run divisions and manage critical functions, let alone lead companies. Everyone knows organizations where key jobs go begging, business objectives languish, and compensation packages skyrocket.
Companies today are engaged in a war for senior executive talent that will remain a defining characteristic of their competitive landscape for decades to come. Yet most are ill prepared, and even the best are vulnerable. Companies face three qualitative challenges:
First, a more complex economy demands more sophisticated talent with global acumen, multicultural fluency, technological literacy, entrepreneurial skills, and the ability to manage increasingly delayered, disaggregated organizations.
Second, the emergence of efficient capital markets in the United States has enabled the rise of many small and medium-sized companies that are increasingly targeting the same people sought by large companies. Small companies exert a powerful pull across the whole executive spectrum, offering opportunities for impact and wealth that few large firms can match.
Third, job mobility and the demand to accommodate working from home, family needs, and personal preferences is increasing. Ten years ago, a high performer might have changed employers just once or twice in a full career.
A war once conducted as a sequence of set piece recruiting battles is transforming itself into an endless series of skirmishes as companies defend their best people, and in particular their future senior executives, under constant attack.
In the midst of talk about recession, the level of activity and engagement for recruiting has never been higher, particularly at the middle and executive levels. The message that is being sent by the so-called “great resignation” is that it is crucial that potential hires experience being valued and having the opportunity to make an impact on the business, profits, bottom line, the whole organization.
CREATING A WINNING EMPLOYEE VALUE PROPOSITION
A winning employee value propositions (EVP) is a compelling answer to the question, “Why would a talented person want to work here?” Instilling a context around talent – not only business acumen and experience but one that includes the whole individual and developing a powerful employee value proposition will operate as a compelling attraction for a company, but they aren’t enough.
A winning employee value proposition necessitates a robust sourcing strategy. The more effective the EVP is, the more people are going to apply for the position, so it is critical that you are clear about the kinds of people that are good for your organization, use innovative channels to bring them in, and have a complete organizational commitment to getting the best. Establishing the right mindset, crafting a powerful employee value proposition, sourcing, developing, and retaining talent – it all makes for an enormous challenge.
Companies start from many different positions and vary widely in the strength of their existing bench. Some have powerful, sustainable employee value propositions; some cannot even articulate why a talented person should join them. Some companies have a talent-building process but no follow-through; others have no process at all. There are also different ways of getting going. A company undergoing a turnaround will have to bring in top talent fast to bring about a transformation in its employee value proposition. Companies in less dire straits can work more gradually on redefining recruitment, employee value proposition, development, and compensation simultaneously. The key is to start now. The coming war for talent may seem like a crisis, but like any crisis, it’s also an opportunity to seize or squander.
INTRINSIC vs. EXTRINSIC MOTIVATION
In his book Drive: The Surprising Truth about what Motivates Us, author Daniel Pink describes the motivational system that has been conventional wisdom in businesses and corporations since the industrial revolution. He calls it Motivation 2.0, and it is formally known in Psychology as extrinsic motivation, defined as a motivation to participate in an activity based on meeting an external goal, garnering praise and approval, winning a competition, or receiving an award or payment, it also includes avoiding negative consequences, punishment, etc. In short, the “carrot and stick approach.”
Motivation 2.0 suffers from three compatibility problems. It doesn’t mesh with the way many new business models are organizing what we do – because we’re intrinsically motivated purpose maximizers, not extrinsically motivate profit maximizers.
He asserts that, in today’s world of work, people are “full-fledged human beings, not single-minded economic robots,” as has been the view since the work of Frederick Winslow Taylor in the early 1900’s. For Taylor, for whom “work consists mainly of simple, not particularly interesting, tasks. The only way to get people to do them is to incentives them properly and monitor them carefully.” One could argue that Taylor’s view of work may have been true in the early days of the Industrial Revolution, but Pink says it is no longer the rule, if it ever was. “For growing numbers of people, work [today] is often creative, interesting, and self-directed rather than unrelentingly routine, boring, and other-directed.”
Pink proposes a new model of why people work and what attracts them to one EVP rather than another. He says that where money is not a factor, i.e., where pay is appropriate and equitable, people are motivated by three factors, all of which fall under the rubric of intrinsic motivation. Intrinsic motivation is the doing of an activity for its inherent satisfaction rather than for some separable consequence. When intrinsically motivated, a person is moved to act for the challenge entailed rather than because of external products, pressures, or rewards.
For Pink, there are three key factors in intrinsic motivation:
Autonomy – the opportunity to be self-directed. The goal of the work may be given, but the method of achieving it is left to the individual to work out.
Purpose – the work has meaning beyond simply producing a product or delivering a service and turning a profit. For example, in a conversation with an owner of 16 McDonald’s franchises in the Midwest, she was clear that for her the satisfaction lay in what she could teach the young employees on her store crews.
Mastery – the opportunity to learn and improve in job performance but more importantly as a human being.
An organizational culture that is committed to these three intrinsic factors and an EVP that communicates that commitment will go a long way toward attracting the best candidates. Recruiters need to be effective, proactive counselors with personal and business credibility and strong relationships with the client and your business units. The need for such a personal approach is fast becoming accepted wisdom in industry – at senior levels of an organization, the ability to adapt, to make decisions quickly in situations of high uncertainty, and to steer through wrenching change is critical, and that cannot be achieved through extrinsic motivation alone.
QUALITY vs. QUANTITY
As noted above, the more attractive you make the positions you are recruiting for, the more applicants you are likely to get. One approach to the triage that is needed is to use an outside recruiting firm to search for suitable candidates and sort for the ones who best fit your organization’s needs. Here again, though, there is the issue of quality vs. quantity. You don’t want a recruiting firm to send you mountains of resumés, but rather to care about the candidates, get to know what makes them tick, and send you only the candidates who are the best match to your requirements.
Theodore Roosevelt said “Nobody cares how much you know until they know how much you care.” When he said this, In Taylor’s world of over a century ago, this was a very strange assertion and would have been met with great skepticism. Today, particularly as younger workers move up in responsibility and rank, company leadership ignores it at their peril, and no more so than in recruiting top talent.
BrainWorks is a prominent boutique executive search firm offering a 30-year track record of successfully sourcing and placing top talent. We solve your hiring challenges by leveraging our vast network of highly skilled talent and our extensive, time-tested industry expertise. To learn more about how BrainWorks can help you, contact us.