March 9, 2016
Talent Talk is a regular column on employment trends written by Glen Esnard, the executive vice president and principal of 20-20 Foresight Executive Search.
There are those who say compensation is the primary attractor and retainer of great talent.
Here are three reasons this position makes no sense.
First, any time you compete on price, eventually there emerges a competitor willing to charge a little less or pay a little more- then you either lose business or shrink margins. Firms built to sustainably compete on economics, think Walmart or Southwest Airlines, are built from the ground up to deliver the lowest cost. The next lower cost vendor will take your client, and the next highest compensation firm will take your talent.
Second, talent attracted by economics alone is mercenary. They generally care little about the firm, its culture, client service model or its people. The likelihood of purely economically-driven talent committing to your corporate strategy is slim. The likelihood of that talent committing beyond the next contract negotiation is non-existent.
Third, there is a far more powerful talent magnet.
I first experienced it when we were rebuilding a company’s capital markets platform, a group I was fortunate to lead for several years.
To reposition the business line, we downsized the group dramatically, betting we could rebuild rapidly with the right value proposition. We were successful, growing back to original staffing levels with top-tier talent within 18 months.
We didn’t have a world-class brand. We didn’t have deep financial resources. We didn’t have the most attractive compensation model. We didn’t yet have the systems and tools we aspired to build.
What we did have was a clear vision of our future, and we had the ability to define the professionalism, character, skills and commitment of those we chose to recruit. We were also crystal clear on what we expected in terms of professionalism, character, skills and commitment.
In essence, we were crafting a new culture through values consistent with our expected service model, and would only recruit those who reflected those values. We were creating a new culture within an existing organization.
Yes, compensation, brand, infrastructure and growth opportunity were important; however the single, common condition our recruits prioritized was the cultural environment within which they would be working. They wanted to enjoy their work and their team.
I review this because it reflects our executive recruiting experience today. With very limited exception, talent wants to work in an environment they enjoy. Age makes no difference. Millennials or boomers, the priority is the same. In fact, top performing boomers may be more discriminating. The common attitude is “Life is too short to work with a**holes.”
Don’t mistake this priority as being soft on work ethic, in favor of some ethereal, feel-good notion that doesn’t really apply to the highest performers. Personal experience and what the talent market is telling us today is simple. The culture of the organization attracts top talent far more aggressively than any other single factor. (We’ve also learned a negative culture will also repel quality talent!)
Consider asking yourself questions I often ask our executive recruiting clients before we commence a search for them. How do you characterize your organizational culture? What organizational practices policies, guidelines reflect and validate that culture? How many employees have been terminated or resigned (self-selection, a better indicator) for cultural non-fit?
Clear, thoughtful and resonant responses typically imply your organizational culture is a magnet for talent. Less clear, thoughtful and resonant responses suggests our task, as recruiters, in a search may be more challenging that it need be.