New dilemmas in the war for talent
At the end of the last century, McKinsey and Peter Drucker introduced the concept of the “War for Talent”. As the most important factor in competition shifted from scarce capital and product to the talent of workers, the major question became “How can an employer attract and retain scarce talent for his or her organization?” I don’t believe that mature organizations have ever thought any different about the importance of recruiting gifted employees. However, the values with which organizations have tried to entice these scarce human resources are very different now, than before.
I can still remember which values attracted me to Shell thirty years ago. First and foremost was the “name”. Shell, Heineken and Unilever were at the top of the list as most attractive companies: Shell because of its international reputation and high-quality jobs, Heineken because of the attractiveness of the product and Unilever for the kind of organization it was. Then my father would also add, “Son, working for these three will ensure you a job-for-life”.
It is no coincidence that in the late nineties there was a shift in the thinking about how to recruit and retain young talent. The employment market was tight. The Internet boom was approaching its highest point. Many young people thought that there was a direct connection between their limitless talent and the results of their own start-up companies. This was particularly the case within the financial services and the high-tech fields. Although the ‘heyday’ for this generation, accustomed to making the “easy” or “quick-buck” is slowing down, the tension between the demand and the supply of well-educated and talented personnel has not diminished.
Not only has the demand of quality employees changed in terms of numbers, but also in terms of profile. An analysis of our database shows that the younger generations Y and Z, from 20-30 years old, have become more inward-directed in the last few years. They express their emotions more, and they feel better working in teams. Moreover, it appears that the younger, high potential employees focus is short-term, and they have a greater confidence in their own abilities. Furthermore, their preference has shifted from the task-oriented “Guided-Missile” to the “person-oriented Incubator” work environment. In this regard, start-ups appear to have responded particularly well.
So, what makes a large organization attractive to a young, ambitious and talented employee? On the demand side, organizations of the old economy find it increasingly difficult to find good candidates. It is apparent that established organizations like Shell, Heineken and Unilever must make an enormous effort to catch up with the attractiveness of younger businesses. There is a tension between the image of these companies and the ideals that young talented people have in their heads. The power-oriented “Family” culture and the role-oriented hierarchical structures or the so-called “Eiffel Tower” culture still dominate these companies in both perception and reality. The big players realize this and are doing their best to change. If you browse the Internet site that Shell uses to recruit young academics, you see the dilemmas that arise from the similar tension between corporate image and personal vision. Shell is looking for people who are global, innovative, team players; people who think in terms of diversity, who want to learn and who value freedom of choice. At face value, this doesn’t look very culturally sensitive. But global thinking doesn’t seem so attractive to young people anymore. Young, talented graduates prefer to work locally. Therefore, Shell also recruits people who want to choose between regions, divisions, and functions.
There seems to be a dilemma between global (one world) thinking and thinking that values diversity (many realities). Big traditional corporates invite people who believe in the equal treatment of men and women, and ask people from different ethnic backgrounds to develop into honorable citizens of the world. In the same way, you can imagine the dilemmas that arise from being oriented towards teamwork (stability/tradition) versus innovation-oriented. A Japanese experience demonstrates that it is not easy to reconcile both.
Apart from the dilemmas between traditional organizations espoused orientations, there are also dilemmas adhering to the image of a large organization, and doubts whether these orientations can be put into practice. However, it is clear that ultimately only those organizations that reconcile these dilemmas will remain attractive in the employment market. There are some good examples of this. The American semi-conductor industry has shown that by creatively reconciling teamwork and individual creativity, you can become an unbeatable player in your sector. Transnational organizations such as Apple and Amazon exemplify how to keep excellent talent by globalizing diversity.
I would very much like to belong to an organization where free-choice and deep learning opportunities and image and reality have been reconciled. There is still a lot of work to do if we want to win the war for talent. And one way is to win the war through engaging staff with values.
Dilemmas in recruiting and retaining the resourceful human
We continue to witness the development of the autonomous and reflective individual. It is an individual that has a full set of needs, internal and external to the organization. Power is diffused and shared. “In contrast with traditional management, where structures and systems are derived from a pre-defined strategy, the new workplace is seeking to balance what matters for the company (its strategy) and what matters for the individuals (their life strategies).”1 This is revealed dramatically in the changing dynamics of the war for talent. Leading organizations subscribe to the view that people are the most important resource.
In a climate in which competition is fierce and rapid changes demand constant innovations, organizations are in agreement that failure to make the best use of its people has serious consequences. These organizations know that any business that fails to ensure that all employees play a full part in the organization cannot hope to optimize productivity, competitiveness, and sustainability.
In spite of this common belief, there are serious shortcomings in how effectively organizations utilize their people. Organizations are implementing a wide range of policies and programs to identify and eliminate pay inequalities and improve their attractiveness, however, great change has not materialized. Some protagonists claim employee engagement can be enhanced by adopting a series of hygiene factors – such as decorating rest rooms with pop culture and rap music and calling everyone by their first names – and these are almost laughable. Similarly, criteria and competencies deemed to be predictors of high and effective performance are also claimed.
However, hardly any attention has been given to a very much under-researched issue, which is the image of the organization to the job seeker. The values with which organizations entice scarce human resources are very different today. Mining our extensive knowledge databases on individual and corporate cultures reveals evidence that supports the proposition that potential employees, especially the younger – from 20-30 year old generation – have become more increasingly inwards-directed in the last few years and their rationale for career security is based on maintaining a set of personal and transferable competencies. It is their ‘employability’ rating based on their contemporaneous skills profile that drives them, not the old notion of corporate security from an employer of high long-standing regard or protection by their trades union.
The traditional adage that working for a major corporate will ensure you a job-for-life is no longer true nor an attractor. As early as 2001, David Guest2 alerted us all to the work-life paradigm yet this challenge has not met with the response it deserves because too often we still approach engagement from the standpoint of ‘managing human resources’ rather than viewing employees as resourceful humans.
We have written many times before3 that in addition to these generic changes (especially in the Western Hemisphere), the world has recognized increasing shifts due to the internalization of business. Yet we still observe that the major instruments and methods used by HR professionals owe their origin to an Anglo-Saxon philosophy and are still dominated by an Anglo-Saxon signature. Typical are the instruments used for recruitment and selection. Although its original conceptual father C.G. Jung was a Swiss, the MBTI and JTI (Myers-Briggs and Jung Type Indicators) are the most used Americanized instruments in business to assess personality type. Similarly, over 8,000 companies use the HAY system for job evaluation world-wide. Originally developed by Colonel Hay for evaluating jobs in the American army, it later became extended to the most popular evaluation instrument for international businesses. And lately, we see the enormously popular Balanced Scorecard developed by Kaplan and Norton that initially helped many North American firms to measure important perspectives of business beyond the financial. But what have these Americanized perspectives done for (and ‘to’) non-American organizations? Obviously, there was an era when globalization was taken literally. “It works in the US, so let’s export it to the rest of the world”, was the main principle. Generally, this approach has failed. In fact, it has only worked in organizations where the corporate culture dominated the local or national cultures (The Hewlett Packard ‘way’, and McKinsey are obvious examples), and also perhaps in organizations where the product was very dominant ~ such as Coca-Cola, Disney, and McDonalds.
So what might make a large organization attractive to a young, ambitious and talented employee now? It is apparent that established organizations must make an enormous effort to catch up with the attraction of younger businesses. There is a tension between the image of these companies and the ideals that young talented people have in their heads. The power-oriented, “Family” culture and the role-oriented hierarchical structures of the so-called “Eiffel Tower” culture still dominate in both perception and reality.
The dilemma arises from the tension between corporate image and personal vision. Global companies like Heineken or Shell are still looking for people who are global, innovative, team players; people who think in terms of diversity, who want to learn and who value freedom of choice (to continuously maintain their employability profile).
This global corporate mindset thinking, appears to be bland (“it’s all the same everywhere”) and static and not offer the freedom to develop one’s own persona. As a consequence, it is not attractive to the young generation X. Young, talented, recently graduated candidates prefer to work locally and have fun.
Global (‘one world’) thinking creates tensions compared to a contrasting framework, which recognizes and values diversity (many realities). Shell invites people who believe in the equal treatment of men and women, and asks people from different ethnic backgrounds to develop into honorable citizens of the world. Whilst apparently laudable, you can imagine the dilemmas that arise between being oriented towards teamwork (stability/tradition) versus individual creativity. Apart from these dilemmas within Shell’s espoused orientation, there is also the dilemma adhering to the image of a large organization and doubt whether these orientations can actually be put into practice.
The UK division of Pfizer is achieving productivity improvement through reconciling the different orientations between (for example) their researchers (who want to do brilliant research) and their committed marketers (who want to satisfy their customer base). The traditional approach to employee engagement based on ideas productivity incentives, goal setting (productivity goals), increased automation and quality improvement initiatives have mainly failed HR. We are helping them to create the ‘reconciling organization’ in which a strong sense of core values supports an environment in which managers are better able to manage change, overcome crises, focus on corporate longevity, achieve the retention of key/effective personnel, develop motivation and identify and thereby secure higher productivity ~ through the alignment and integration of opposite orientations.