Bonds. Stocks. Mutual funds.
Chances are when you think of savvy business investments your mind favors those of the financial fashion. After all, it’s a natural correlation; financial investments lead to financial rewards.
However, if you really want to see your organization grow in the global marketplace there is a much more valuable commodity you should be coveting: talent.
But it’s not as easy to obtain as you’d think.
- 70% of organizations cited “capability gaps” as one of their top five challenges.
- Over 1 in 3 employers reported difficulty filling open positions due to a lack of talent.
- 63% of CEOs are concerned about the availability of key skills within their companies.
The job skills gap is a real problem and is expected to become worse in the next few years. Ed Gordon, author of Winning the Global Talent Showdown, predicts that if the structure doesn’t change there will be 14 million to 25 million vacant jobs by 2020 that organizations won’t be able to fill.
Why is there a talent shortage?
Although there are currently 11 million unemployed Americans, over 4 million jobs are left unfulfilled.
The reason? Talent shortages and a skills gap.
“There is a mismatch between skills being taught in the U.S. and the labor pressure in the market,” says Adam Wiedmer of Seven Step RPO to trainingmag.com. “Psychology, history, and performing arts account for 22 percent of degrees earned in the U.S., but the corresponding professions don’t appear in any top rankings for labor demand. Of the top majors granted in the U.S., only 5 percent fall within the high-demand areas of engineering and technology.”
Education and training (or lack there of) are just the tip of the talent shortage iceberg. In addition to a lack of training, Baby Boomers have also begun entering retirement.
The generations that followed Boomers were significantly smaller than their postwar predecessors. As a result, there are more people exiting the workforce than replacing them. Not only is there now a smaller talent pool for more senior positions, those available may be lacking the necessary training and skills to be successful within their new positions.
Gallup finds that companies fail to choose the candidate with the right talent for the job 82% of the time. That includes promoting from within. The Harvard Business Review states that 40% of internal job moves made by people who were identified as “high potentials” end in failure. These failures are indicative of how difficult it is to find truly skilled talent.
As much as your organization has a five year business strategy, it is as important, if not more so, to have a plan for acquiring and retaining talent.
Here are 3 ways you can make sure your company is investing in top talent.
1. Identify Candidates with Principle and Train Them in Skill
Today the recruitment process within most organizations is a waste of time and money. On average, companies will spend 2% of their time recruiting and 75% of their time managing their recruiting mistakes. This is because too often recruiters put too much weight on certain skills and not enough on character and principles.
In the acclaimed book, 7 Habits of Highly Effective People, author Stephen R. Convey defines principles as “deep, fundamental truths that have universal application… When these truths are internalized into habits, they empower people to create a wide variety of practices to deal with different situations.”
When it comes to building a stellar team, skills can be taught but principles cannot. You want to look for candidates who encompass the principles your organization values, such as integrity, potential, and service, and hire them. Once you indicate the best candidate based on their principles, there are countless resources that can help you train them such as Lynda, Udemy, and even YouTube.
Wouldn’t you rather have an employee who may be lacking industry knowledge but has potential over a trained employee with no drive to grow?
2. Hire Managers Who Can Manage
A common mistake made within most organizations is promoting tenured employees to managerial positions over those who have a talent for it.
Managerial skills don’t develop because someone has worked at a company for “X” amount of years. The best managers have innate principles and skills that can’t necessarily be taught.
- They motivate employees to take action and engage them with a compelling mission and vision.
- They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
- They create a culture of clear accountability, for themselves and their employees.
- They foster relationships with open dialogues that create trust, and offer full transparency.
- They make decisions that are based on productivity, not politics.
Easy enough? Not exactly.
The same study found that only 1 person in every 10 possesses all five of these talents. However, if you do have a manager with all 5 skills, they contribute about 48% higher profit than an average manager.
Just as you wouldn’t hire a salesperson to be a web developer, you shouldn’t hire or promote just anyone to be a manager.
3. Craft a Culture
Recruiting and hiring the right candidate is just one aspect of investing in top talent. To retain the best you need to create a company culture that fosters growth.
Company leaders agree that culture is a major competitive differentiator. Yet, according to Diane K Adams, less than 10% succeed in building high performance cultures.
The utopian company culture differs organization to organization, however, having an open dialogue with employees and listening to what they want is a good place to start. Who better to offer insight on what type of culture would work for your company than the people working it every day?