Insights into the forces shaping our industry.
The War for Talent Marches On
In the late 1990s, McKinsey & Co. coined the phrase “war for talent” as competition was becoming increasingly global, the workforce was aging, and people were job-hopping more often. The War for Talent was the very first article I wrote for the Buzz when we launched our newsletter in 2000 and 22 years later it’s truer than ever! The demographic and societal forces that kicked off the war for talent have only become more intense.
For executives in many industries—particularly tech—the talent wars have been a reality for years. And now they’re the new normal for everyone.
Baby boomers are retiring earlier than expected and in increasing numbers. In addition, 1 in 4 employees across generations are planning to change jobs as the pandemic subsides. With uncertainty around childcare access and school closures, nearly 3 million women have left the labor force and college enrollment is declining making that pool even shallower to develop fresh talent. Not to mention, nearly every competitor you have is fighting for the same talent.
These trends have led to the lowest labor force participation rate since the 70s. And with a slowing population growth rate, there are simply not enough workers to fill open roles. While unemployment number are at a record low, the unemployment numbers for those with college degrees are typically half the national average, making both of our jobs even tougher.
The original war for talent was focused on senior executives and leadership skills but today, that envelops just about every functional discipline within an electrical distributor. The largest shortage falling to skilled inside sales, technical support, and business development.
Many companies are increasing wages and offering sign-on bonuses in response, but often still struggle to retain or effectively develop that talent. A higher wage will fill some roles today, but it won’t build the skills your company needs for the future or create the engagement that will lead to long-term retention.
In 2016, Millennials became the largest generation in the U.S. labor force. They have higher rates of job mobility, more demands for flexibility, and are more open to a ‘gig’ then any generation before. This is in polar opposition of the Baby Boomer generation where workers were more apt to stay with a company for their entire career to retire with the gold watch. Times are certainly changing, the landscape of this industry will continue to evolve as technology advances and new ideas are brought the forefront in the industry.
How to Win
Build Relationships with Universities
Create a strong presence on campus to build brand awareness create some buzz for your company. Here you will find tomorrow’s leaders in your organization and a story that starts with a college recruit and ends with a leadership role, gains you more favor with tomorrows stars than you could ever expect. Who doesn’t love to hear that the company (fill in the blank title) came up through the same path?
Compensation is Just the Start
Money is important, but it’s not the magic bullet. At the end of the day, a large paycheck won’t lead to motivation or performance or even guarantee they’ll stick around that long. Fair pay is hard to define in this business, but a general rule of thumb is to make your candidate an offer that is better then where they are today, no one wants to go across the street to do the same job for the same money. A balanced benefits package is just as important, but you’re unlikely to differentiate yourself on that front…so don’t fight a losing battle by putting all your eggs into a basket that ultimately looks like every other basket.
Compete on Company Culture
If you can’t stand out with money, do it with culture. If pay is the same across the board, differentiate yourself as a GREAT place to work. While you can’t mandate culture you have to build it and employee recognition and company culture that stands out from the pack wins (almost) every time.