In Episode #1055 of the Arete Coach Podcast, today’s talent landscape is discussed and insights are shared on the talent shortage, surge in labor bargaining power, and increasing price of talent. With a high demand for talent and low supply of skilled knowledge workers, what are businesses to do? The answer is simple: stop focusing on the immediate issue of hiring talent and instead address the systemic issue that got us here to begin with.
The systemic issue
What we are experiencing today is something much greater than a temporary talent shortage; it is the result of the Silver Tsunami—a term that describes the age at which Baby Boomers enter their senior years and withdraw from the workforce. The Silver Tsunami wave was expected to crest around 2028, however, COVID-19 has sped its arrival. Today, we are seeing Baby Boomer retirements increase and significantly impact the economy as a result.
In 2014, Harry Dent, an economic forecaster, wrote a powerful book called The Demographic Cliff that described how in the mid-20’s the US experienced a seismic demographic cliff of older generations retiring and fewer individuals from younger generations entering the workforce. In 2021, Ron Hetrick, et.al., picks up on this theme and describes how COVID-19 has exacerbated the demographic effects of the workplace, highlighting a projected growing problem for the American workforce—the Sansdemic: a lack of people in the workforce (Coffey, 2021). In a recent publication from Emsi, this trend in today’s workforce has been called a “demographic drought” and affects business leaders’ hiring processes nationwide. What exactly is the Sansdemic and how was it caused? Whether you call it a Silver Tsunami, Demographic Cliff, or Sansdemic drought, it all adds up to fewer workers in the workplace.
Where we go from here
To combat the systemic problem of too few qualified workers available to hire, consider your hiring strategy. Think about automating positions, leveraging software, outsourcing to other firms, and hiring fewer people. In hiring fewer people, find candidates who can do the work of 2-3 people and pay them more than current average 90-percentile compensation. This approach will give you work worth 2-3x an average employee while keeping costs under control and staying within budget. If you’re interested in understanding how to find premier talent, review ePraxis’ 10-step proprietary process proven to secure game-changing talent.
“If you think it’s expensive to hire a professional, wait until you hire an amateur.” - Red Adair, American Oil Well Firefighter
Your go-forward strategy
Below are 20 strategies business owners and CEOs can implement to weather the current talent landscape.
Rethink labor requirements
Focus on the Automation Imperative. Recognize that talent is scarce today, and labor prices are going up. Figure out what you can do today and in the near future to automate tasks of all types in your business, in order to reduce labor requirements now.
Evaluate the basket of goods you sell. Figure out what you can make profitably that takes less labor.
Look into outsourcing. Figure out what you can outsource to other companies to reduce your labor input costs.
Determine geographical job requirements. Figure out what jobs can be done remotely and (i) globally outsource and (ii) rurally insource talent. Most importantly, be flexible. Being rigid will lose you employees who seek greater life balance and flexibility.
Revise recruiting methods
Use humans to recruit. Databases such as Indeed and Linkedin are great tools but they lack human touch. During the hiring process, you must nurture the prospective candidates you seek.
Increase pay for performance options. You can pay any rate to an employee that makes you more money; getting a pay-for-performance compensation plan will be attractive to high performers.
Greatly speed up your hiring processes. Great talent is scarce and may only be available for a few days before finding employment with another firm. For example, the average shelf life of a great financial controller is five days. If your hiring process takes 3 weeks, good talent will have already been hired by others.
Actively manage your talent pool. Engage, engage, engage with employee candidates.
Use as many talent boards as you can. While many employees have found their job on Indeed, there are many other places to look; so post in at least 7 or more locations per search.
Let AI tools work for you. Several services are available that offer AI-based candidate hunting. For example, a tool called Loxo can find look-a-like candidates based on a LinkedIn address. While connection between a human and the candidate is still required, these tools can help you find more people quickly.
Reduce friction in your candidate selection process. Sometimes, it’s just too hard for candidates to apply for a job. Find new ways to screen talent and streamline the process.
Define the hiring process. Hiring talent right now is a grind. You are making sausage; it's hard work, but if you work the process, you end up with something deliciously good. You must have processes and run them to find results. Not only must you have processes, but you must be systemized, timely, and present in front of the candidates to ensure they see your company’s professionalism and value.
“If you pick the right people and give them an opportunity to spread their wings—and put compensation as a carrier behind it—you almost don’t have to manage them.”- Jack Welch
Focus on retention
Prevent regrettable and untimely departures. Pay your people more, and figure out what they want in addition to pay that would make your business the best place to work.
Consider additional deferred compensation. Integrate equity, stock options, and other time-delayed compensation measures to prolong employee performance, and create a competitive advantage against competitor employers seeking to hire your employees. Figure out how to lock up your best talent in roles, positions, and opportunities where they won’t want to leave, and make it more costly for others to steal them away.
Advertise to the aging population. Create a campaign that targets the aging population that retired early, and encourage part-time, flex, and other work arrangements to gain their wisdom, insights, and labor participation for a lifestyle they can afford.
Always be on the lookout
Keep up with the latest research. Consider the advice in the McKinsey report on what employees want now.
Hire employees who are already working. The employees you want most are those who are already working, so develop your own fan club of prospective future employees and nurture and develop them. Create a positive flow of candidate attraction to you and your company by growing relationships and making your own company one of the best places to work.
Create a steal-away strategy. Talent must be sought after, identified, targeted, and nurtured. You might consider developing your own target prospects list and implement your own steal-away strategy. After all, as Jim Collins has said, “people are not your most important asset. The right people are.” Tune into the end of Episode #1055 for candidate steal away strategies that have proved successful.
“Hire people who are better than you are, then leave them to get on with it…; Look for people who will aim for the remarkable, who will not settle for the routine.” - David Ogilvy
Try, try & try again
Hire a headhunter or recruiting service. If you aren’t finding the right candidates, consider hiring a headhunting or recruiting firm that’s fully invested in your success with a team of active recruiters dedicated to your search.
Be patient. Don't chase talent that is too needy, costly, or bad behaving. There are some real prima donnas out there who are paid too much with no promise to perform.
For more detail and commentary, tune into Episode #1055 of the Arete Coach Podcast.
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