If you thought 2021 was going to be an easier year in the War for Talent, you should get ready for a major upset. According to a recent Prudential survey, as businesses reopen amid COVID-19 vaccinations, more than a quarter of employees plan to change jobs. The surveyed employees cited more pay, remote-work options, flexible schedules and promotional opportunities as reasons to stay. Unfortunately, I think a lot of organizations will be caught unaware when the mass exodus begins. Part of my current role not only includes navigating the tumultuous waters of the current talent landscape but also getting a handle on retention. So what do companies need to begin focusing on ahead of the Great Resignation? Here are three tips to prepare for what’s ahead.
Identify your top talent and show the love
It’s sad how often companies allow their top performers to go unnoticed, unappreciated, and undervalued. COVID shined a light on many of the poor employee practices firms had in place for years, but according to the Prudential survey, things are about to go into hyperdrive. If you do not have a retention practice for the top 20% of your organization, the severity of the risk with the great resignation will have a direct impact on your bottom line.
The first step is obvious: identify your top performers. I like the method Netflix used in its early days in identifying who the company was willing to use. According to the book “No Rules Rules”, the executive team categorized the employees in three categories based on the question: What would we do if the employee received a counter offer?
- Group 1: Counter the offer for 15% above the market rate.
- Group 2: Consider the impact but not necessarily counteroffer.
- Group 3: Wish the employee success in their new role.
This strategy allowed them to make the necessarily layoffs in the early 2000s without severely impacting their ability to grow. In fact, Reed Hastings shared how their productivity increased more than 30% after the layoffs. This changed the way they viewed talent and created an offense playbook they follow to this day. Rather than waiting on their top performers to receive an offer from a competitor, the firm frequently runs market analysis to keep a pulse on changes in the market rate. If the market rate increases, the firm preemptively increases the salary of those in their Group 1. It’s one of the ways Netflix has continued to retain its top performers in spite of a competitive market.
Stop being CHEAP-You get what you pay for
It is so frustrating to work so hard recruiting a star candidate, only to have the hiring manager short change the offer. With the workforce participation rate at 61%, the opportunities to engage qualified candidates are becoming slim. Most of the qualified candidates you may be after are also being courted by four other companies. I recently read that for every qualified candidate, there are 7 job postings targeting their skills. In short, if you want quality, you will have to start paying for it.
I leverage one of our tools to due market analysis on new searches as part of the intake discussion. I find it helpful to show the manager what the market pay rate is before the search begins. Most of the time, managers only look to hire someone at the incumbents salary, not taking into consideration the reason most employees leave is for higher compensation. Creating this habit on the front end allows recruiters to set the right expectation prior to wasting time in an already quality market.
If you do not have access to a technology that allows you to do this, it’s also helpful to leverage your CRM or a simple spreadsheet to capture the candidate information, including their price to move. I’ve used this to facilitate what I call a “Fly By” update with the manager. This shows them the quality of candidates you are able to find as well as the average price of the talent in the market. Doing this type of work on the front end will save you the time and embarrassment of presenting a less than stellar offer.
Finally, recruiters should go on the offense and present data points now to their executive teams. I find it helpful to do a quarterly market update with the executive team to educate them on important factors like job shortage, unemployment rates/trends as well as shifts in the market. Recently, Amazon announced plans to hire 75,000 works for their warehouses and pay a 1,000 sign on bonus. I immediately shared this information with our executive team to begin the entry level wage discussion in the group. We can’t hold it against hiring managers for being ignorant of market trends if we aren’t taking the lead in educating them.
Develop and Nurture your Pipeline
Any successful recruiter I know has a pipeline of qualified candidates. Rather than recreating the search every time a position opens, you should have talent readily available for your clients. This not only increases the value you bring to your hiring partners but also lowers the stress commonly associated with recruiting. In this job market, I think it’s key to get ahead of the Great Resignation by understanding your talent risks and understanding what your pipeline looks like in those areas. Questions to ask yourself include:
- Do I have enough candidates in my pipeline to meet the potential 25% resignation rate (worst case scenario)?
- When was the last time I reached out to my key targets in the pipeline?
- If it’s been a while, should it be the recruiter who reaches out or the hiring manager?
- Would it be a good idea to draft some company content or “company in the news” articles to share with the pipeline to keep them warm?
- How often should you be reaching out to these key targets?
- If you do not have enough in your pipeline, how can the recruiting team parse out time to develop more candidates to prepare for any resignations?
Maintaining a pipeline is a critical habit in successful recruiting but even more important with the market constriction, increase in competition and the pending Great Resignation.
Sure, “The great resignation” is coming according to Anthony Klotz, an associate professor of management at Texas A&M University but if you prepare correctly, you can use this as a competitive advantage. These are some simple tips to help recruiters advise their clients and prepare for the worst.
What is your company doing to prepare? How is your firm navigating through this challenging and ever-changing talent landscape! Be sure to comment below.
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