Blog Post

Looking for Talent? You Can Find it in the Blue Ocean

Ira S. Wolfe

President, Success Performance Solutions

Brace yourself. The talent war didn’t go away due to the pandemic. It heated it up. COVID-19 didn’t ease the skills shortage. It exacerbated it. As Warren Buffet once said, "only when the tide goes out do you discover who’s been swimming naked." Well, the pandemic tide rolled out, and based on conversations with hundreds of business owners the last few months, a lot of organizations are standing naked.

One small business owner shared that, in 2019, he felt lucky if his company received 50 applicants from Indeed and 1 or 2 of them were qualified. This May, he posted a job and had 1300 applicants in less than 24 hours. He pulled the listing. His company simply wasn’t equipped to handle recruitment and screening in a high unemployment market.

So, what does that mean for HR and recruiting teams? It might be time to rethink your hiring strategy—and reflect on whether the challenges you’re facing today are a result of COVID-19, or more foundational problems that have been there all along.

"New Normal," Same Challenges

I first thought the small business owner’s story was an outlier but, surprisingly, I keep hearing it over and over. "We have 500 job openings and can’t get enough qualified applicants to fill a fraction of them." Yes, you heard me right: record high unemployment and jobs remaining unfilled.

In the case of the small business owner, the position was a sales job. It pays well and doesn’t require superpowers to do the work. What’s the problem? Employment brand really matters. Following a quick search of company reviews, I discovered this company consistently is rated in the low to mid 2s (out of 10). The pandemic didn’t fix bad management and bad culture.

COVID-19 also didn’t miraculously give workers new skills. In fact, the sudden need for work-from-home skills made the need for effective upskilling and reskilling programs all the more plain. Managing the family calendar was a walk in the park compared with juggling the boss, teams, clients and kids without ever leaving the house. Many workers used to have IT on speed dial. Now each remote worker is an amateur IT professional. Reserving a meeting room down the hall for your client appointment required little, if any, skill. Today, it’s an enormous challenge to lead, present, sell and participate in video meetings.

Taking a New Tact: Blue Ocean Strategy

All this labor market disruption creates a lot of noise and chaos. Reimagining and reinventing require a fresh approach. Fortunately, you don’t need to recreate the wheel to succeed. You can simply apply the principles of Red and Blue Ocean Strategy, created by W. Chan Kim & Renée Mauborgne.

Red oceans in HR refer to the conventional approach to recruiting labor. Fishing for talent in the red ocean views the labor pool as highly specialized and defined by years of experience and education. It relies on compensation and benefits to bait candidates. The competition is consequently fierce based on a limited resource mindset, which turns the ocean red. Hence, the term ’red ocean.’

Alternatively, the ’blue ocean’ encourages you to leave the competition behind and pursue an uncontested market. In other words, employers looking for talent don’t fish in the same pond as everyone else. Here are some opportunities available to business and HR leaders using blue ocean strategy:

1. NIMBY Recruitment.

"Going to work" will certainly return (in some fashion), but working remotely is here to stay. That means that the labor pool for many jobs and industries is expanding from local to global. Commuting distance, public transportation, and relocation hurdles are disappearing. Economic recovery efforts are destined to be unequally distributed.

What the shift means for HR and talent recruitment: A lot of very talented people live outside your red ocean. Accordingly, "fish" wherever the talent you need already is. Some very talented people can’t or don’t want to relocate. The blue ocean opens access to other remote communities too—disabled, minorities, and disadvantaged—who might not otherwise have access or the means to commute. Remote work makes it easier for employees to pick up extra hours and attract people who need part-time work but don’t live in your backyard.

2. Attract Candidates with Blue Ocean Perks.

A May working paper by Erik Brynjolfsson reports that half of the people employed before the pandemic are now working remotely. Pre-COVID-19, the figure was about 15%. (In 2018, a U.S. Census Bureau survey found it was only 5.3%!) With all these employees working from home, perks like ping-pong tables, employee lounges, cafeterias, free coffee and snacks aren’t so attractive.

So, what "blue ocean" perks might attract top talent? Consider helping employees work from home effectively and efficiently. Many remote employees still don’t have working computers, webcams, headsets, printers or fast internet connections. Figure out what kind of equipment and internet access they need—and get it to them. Help them replace their stand-up ironing board "desk" with an allowance for a functional desk and comfortable chair. Fraying these costs will help attract remote talent.

3. Think Experience, Not Technology.

Historically, HR purchased technology to automate existing systems and processes—often at the expense of candidate and employee experience. And that technology, in turn, codified consistency and perpetuated red ocean hiring. In many cases, HR technology became a barrier, closing off opportunity and vision, separating HR from job seekers. Friction-filled, technology-dependent processes were used to test the resilience of job seekers to jump the barrier, using a playbook more aligned with competing for an appearance on "Survivor" than applying for a job.

Blue ocean HR leaders will make the technology "disappear" by focusing on value creation instead of the technology itself. At one time, offering an online application was a competitive advantage. Today, the process is all FCDD-up (filled with frustration, confusion, disappointment, and distraction.) Fix it! Use technology that allows you to identify qualified candidates quickly—and without them submitting pages of non-essential information. Use chatbots, video, text, or automated responses to engage quickly and often.

The same is true for using technology to new skill your existing workforce: use tools that deliver learning in the flow of work (say, as an employee is preparing for that daunting presentation?) to help recruit from within—as well as externally.

It’s time to start fishing for talent in the blue ocean. Blue oceans introduce unbound opportunity, unexplored and untainted by competition.

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A New Poseidon Adventure: Flipping Succession Planning Upside Down

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A New Poseidon Adventure: Flipping Succession Planning Upside Down

Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.

The Hidden Costs of Ignoring Your Talent Management Strategy

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The Hidden Costs of Ignoring Your Talent Management Strategy

Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.

The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance

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The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance

With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.

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