How To Win The War For Talent

The war for talent is a term first used by Steven Hankin of McKinsey & Company in 1997. It refers to a competitive landscape of today's economy when companies fight to recruit and retain the best employees. When introduced it pointed the importance of human resources in the knowledge based economy over anything else. If you have the best employees, you win.

The funny thing is that when you ask around you get different answers on what "talent" actually means. Someone will describe it as inborn traits, someone as ability to learn new things, someone as the skills required for the job, someone will talk about leadership and ability to deliver results. Talent can mean many things. You know it when you see it.

That leads us to the problem that the war for talent caused. Companies fight for what they believe is the best employee. And the best employee is the one that everyone else wants too. There might be ten different candidates, but if every other company wants to hire Joe, then he must be good, and so you want to hire him too. You lose interest in the nine others and find something wrong with them quite easily. You may do this unconsciously. You simply use the same criteria as everyone else.

Instead of asking whether you truly need Joe, and some of the nine others wouldn’t be a better fit for your organization and the job in question, you wonder how to get this one talented employee to work for you. You offer big compensation package and tons of perks. That is how you beat your competition. Except, you don't. By getting into this bidding war you’ve already lost.

You may have won the bidding battle, you may have won the battle for couple of individuals, and you lost the war for talent. You've got your all-star team by overpaying them, and by treating them like gods. You then spend lots of time to babysit your stars, making sure you don't upset them as they could leave tomorrow for better offer from someone else. You tell your stars what they want to hear, not what they need to hear.

Because of the way they are treated, they develop a god complex. It is harder and harder to retain them and you need to pay more and more. Ultimately, your stars leave anyway. They feel they are not growing, they don't feel enough recognition, they feel they are too good for you and go work for a more recognizable brand or a startup where their talents can be used to the full and where they can potentially make really big money.

You created a culture of entitlement. You created a culture where employees develop a skewed view of their abilities and their contribution to the company. They greatly overestimate their skills and are not self-aware enough to realize it. So they complain, and don't grow. It is hurting you, it is hurting the employees, it is hurting the business, and it is hurting the whole ecosystem where employees are jumping from one company to another in the search for some higher meaning and not finding it.

Perks focus conversation on the wrong things

It is a basic human need to judge our own abilities more favorably than others would describe them. We believe to be better than every other person on most of the things we do. No one likes to feel below average and that leads us to a problem. I love the study performed by Ola Svenson from University of Stockholm, asking students to compare their driving skills to other people. 93% of the U.S. sample and 69% of the Swedish sample put themselves in the top 50%. This is a mathematical impossibility and shows how unrealistic views we have of ourselves.

The moment we succeed at something we attribute it disproportionally to our own skills, abilities, and talents and tend to ignore the role others, or the environment, played in it. What we need at this point is someone who gets us grounded in reality and keeps us honest. We need someone who gives us a direct feedback, helps us realize that other people helped us and they deserve some credit, and even though we played a role, there were things we can learn even from the success and do better next time. What we don’t need is someone piling more and more perks in front of us to reinforce our own belief in our greatness.

Instead of talking about what material possessions you can give your employees, talk about how you make them feel and how you make them better human beings. Your employees spend lots of time in the office and the tone you set also permeates the rest of their lives. If all you talk about is money and benefits, that is what sticks with them also when they get home. They talk about money, expensive stuff they can’t afford, that they need yet another raise to afford a better car, they need to look for a job that is going to pay for their ever increasing needs.

If you talk about self-awareness, learning and appreciation then they bring it with them home and are kinder to their family. They talk about spending more time with their kids or the community, helping others, learning something new themselves, and being appreciative for what they’ve got. I’ve been to various countries in Africa already several times and as I wrote here, we who live in so called developed countries should feel really appreciative for what we’ve got and not whine about unfair life and how no one appreciate our greatness.

“To win the war for talent, refuse to fight, and prevent creating the culture of entitlement by focusing on self-awareness, learning, and appreciation.”

Building a culture of self-awareness, learning and appreciation

Redefine talent accordingly. Don't look for the dream employee, rather focus on couple of traits that will help people grow into the roles you need them to play. The three things you are looking for is a fit for your culture in terms of values, willingness and ability to learn, and willingness to work hard. That's it. You don't need anything else. When you look at the world through these lenses, you realize that the number of potential candidates grew significantly and you ended the war for talent. There are seven billion people on this planet and most of them have ability to learn and grow.

Once you get your employee who may not be a superstar today you need to work diligently to make them one. You do this by focusing on couple of aspects:

Promote self-awareness – as a leader you help create self-awareness by building a feedback culture. By being honest with yourself and your team, you keep everyone anchored to reality. If people understand what they need to improve, they are more likely to actually go and improve it. They will grow. If no one admits that they have something to be better at then they will be stuck in their ways and their talents and abilities will plateau.

I love the concept of Radical Candor as introduced by Kim Scott and I talked about its advantages in Leadership Means Speaking Up. The effect heightened self-awareness has on people is the recognition of who they really are and that in turn helps them set realistic expectations and increases their chances to find the right career path. They will like their jobs more, and stay longer with the company.

Promote learning – if you hire smart, hardworking people who don’t necessarily have all the domain knowledge you need to give them opportunity to catch up. Creating a culture where it is ok to ask questions, where people have enough time dedicated to learning, where it is acceptable to make mistakes, and where the domain experts are expected and appreciated for helping others to learn is the right way to solve this problem.

Promote appreciation – the right incentive to help smart and hardworking people to give and appreciate feedback, to teach and learn, is not giving them big bonuses but to make it clear that you appreciate what they are doing, that you appreciate they care about others in the team, and that you appreciate them as people. Telling someone “thank you” is much more powerful motivator in long-term then giving them five dollars.

Yes, everyone will appreciate five dollars. At least for half an hour before they spend it. But everyone will appreciate “thank you” also tomorrow and next week when they remember that what they did mattered to someone, and made someone’s life better. We all need to feel that what we do matters to others, that what we do has meaning. And it spreads. People won’t hand over the five dollars to their colleague as appreciation, but they will follow your example and say “thank you”. If you can create a culture where people help to each other and share the appreciation with each other you are half way to solve a retention problem.

Reward attitude – focus more on rewarding the right attitude that reinforces the culture you are trying to create rather than a specific domain knowledge. You might have one or two domain experts on your team and they might be the ones who design all your systems, but unless they fit with the culture and the rest of the team, you are creating a huge business risks. If they don’t share their knowledge, don’t play well with others, and don’t feel the need to learn and grow themselves there will be a day of reckoning. These brilliant jerks work short-term, but ultimately they will leave and no one will be able to pick up the pieces. They may also work against your efforts of building self-aware, appreciative, and learning culture. Don’t reward brilliance, unless it is combined with the right attitude.

Treat people with respect – treating people with respect means several things. First, it is about how you interact and communicate with others. It is about talking to your employees as to your equals, not patronizing them, and not trying to put them down. It means you respect them as individuals, with their specific needs, wishes, and dreams. Be inclusive and wary of bias. Only because someone doesn’t look the way you do, or doesn’t do the things exactly how you would do them, doesn’t mean they don’t bring value and don’t deserve respect.

It also means you make sure they understand where they stand with you. By providing open and honest feedback, you let them know what you see as their strengths and weaknesses. It is your moral responsibility as a leader to be very transparent in this. If people know what they need to improve, they can work on it. It also helps managing overinflated egos that may be disruptive to the team, and may hurt the person’s chances for satisfactory life. Not telling people what they need to hear is disrespectful and patronizing.

Have everyone in their sweet spot

The key to all of this to work is to have everyone in the company in their sweet spots. I talked about this concept in You’ve Got The Right Guy… In The Wrong Job. Once you and the employee recognize what their strengths and limitations are, and once you are honest with each other about it, you can find the right role for everyone. People who are in their sweet spot are more productive and more satisfied with their work. It is a win-win situation for both the company and the employee.

More on topic of Leadership and Recruitment:

Why Leaders Shouldn’t Be Nice

Leaders Are Guardians Of The Culture

How To Practice Personal Leadership

Leaders Need To Be Genuinely Interested In People

Why Leaders Should Stop Obsessing With Happiness

Be A Leader Not A People Pleaser

The Most Difficult Thing In Management

Do you believe there is a war for talent? What are your tips on winning the war for talent? What is your approach to getting the people you need and retain them so the company can grow fast and prosper?

Photo: Javier-Rodriguez / Pixabay.com

Originally posted at my blog about management, leadership, communication, coaching, introversion, software development and career TheGeekyLeader. Follow me there or me on Twitter: @GeekyLeader