What talented people want has changed. They used to want high salaries to verify their value and stable career paths to allow them to sleep well at night. Now they want purposeful work and jobs that fit clearly into the larger context of their career. And that means they want jobs that are sensible parts of an ongoing journey through a series of professional endeavors — not some supposedly linear path toward "success".
The difficulty is that companies haven't quite figured out how to provide this. In fact, for all its accomplishments, business in the 21st century has a dirty little secret: Statistically speaking, companies aren't sure how to hire the right people.
Recruiting, staffing, and hiring-support services is a $16B industry, yet 52% of U.S. employers report having difficulty filling key roles. A 2012 Pricewaterhouse Coopers survey found that 60% of CEOs did not believe they had the talent they needed to be successful, and one in four had to delay or forego market opportunities and strategic initiatives because they didn't have the right talent.
The consequences of mediocre hiring go beyond lost opportunities. They include accidentally getting the wrong people (meaning the person resigns or is terminated within 18 months), which as any manager who has made this mistake knows, is very expensive. In 2012, Pricewaterhouse Coopers' Saratoga team found that the combined costs of unanticipated turnover (including lost institutional knowledge, diminished productivity, and direct hiring and onboarding costs) are staggering: 20-200% of the employees' original salary. For those companies on the high end of turnover (75% percentile), turnover costs are equivalent to nearly 40% of earnings.
The inverse is also true. Studies show that engaged employees are 50% more productive and 33% more profitable. They are also responsible for 56% higher customer loyalty scores and correlated with 44% higher retention rates, leading to great gains in productivity over the long run.
So the question is: How do companies find and cultivate those fulfilled employees?
At my company ReWork, we work with exceptional professionals who want to apply their expertise and skills to the most pressing social and environmental problems of our time. Having achieved mastery and at least some degree of wealth, they crave the one thing most companies still don't explicitly offer them — purpose.
We've heard from associates at all the big management consultancies, analysts at the largest investment banks, developers at the most prominent technology companies, and senior managers from Fortune 50 corporations, and they all tell us the same things. They are not picking their next job based on the size of the paycheck. They are instead looking for a worthwhile mission and promising team to join. And, they are having a frustratingly hard time finding that.
And therein lies the opportunity. Employers who are watching closely see the implication clearly.
Offer purpose and career context, and the talent will come.
Take Moneythink, a Chicago-based financial literacy nonprofit, that pulled in a Fortune 50 business analyst to lead their expansion. Or The Eleos Foundation, a Santa Barbara-based impact investment firm that snagged an ex-Microsoft, Haas School of Business superstar to advance their investment strategy. And iDE's Last Mile Loo project, an ambitious vision for beyond-grid sanitation systems, that hired a team of seasoned fundraisers to help them win $100K from the Lipman Family Prize at the Wharton School. The list goes on.
Here's where your company can start:
Get serious about impact. Determine the positive impact your organization is seeking to make in the world, and do that goal justice. You don't need to be a social enterprise or a triple-bottom-line firm, but joining the 30,000+ ethical and sustainable brands in U.S. will mean you have a much more compelling purpose to offer, even if it isn't completely unique.
Warning: You cannot fake purpose. That's worse than not prioritizing it at all. People can tell the difference, trust me.
Tell that story, and tell it well. Once you know the mission you're trying to accomplish, tell the world. Call it marketing or communications or storytelling or design, but make sure you're getting across how much you care about your vision and how you're working towards it. If you do so correctly, you'll have their hearts beating before they've even heard the details. Things like start dates, vacations days, and even salaries and bonuses are then far less likely to be deal-breakers.
Make talent your #1 priority, period. Attracting, evaluating, hiring, and retaining the best people is serious business. Getting the best people builds a cultural momentum at your firm, making it easier to attract and retain them in the future. At the end of the day, that is how you make systematic progress. That is how you win. If you don't have a dedicated talent team that is on the pulse of what the most dynamic professionals long for in their work, consider investing in one.
Design your roles for their future, not just yours. Recognize that many people now see each job as just one of many stepping-stones that they'll visit over the course of their career. The best way to keep them with you indefinitely is to focus on making your stone as attractive and inviting as possible. Decent pay, rewarding perks, and large doses of autonomy (on top of a compelling mission) demonstrate that you take their professional development seriously. What networks, knowledge, responsibility, or skills can your company provide better than others?
Do these things, and you'll see the most dynamic, effective, and inspired professionals you've ever worked with show up on your doorstep. If harnessed correctly they'll be the best thing that ever happened to your company — and for society.
Nathaniel Koloc - Co-founder and CEO of ReWork
Source: Harvard Business Review