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Whatever business you’re in, your company or project is only as good as the people working on it. This is as true now as it has always been. However, it was not until quite recently the business community has realized that we can’t keep recruiting talent the way we always have.
In the old days, a company needing to fill a position would run an ad in the local paper or on a job site, and then sit tight. Applications would pour in, some filtering would take place, and the best possible candidate out of available applicants would be hired. Somehow that did the trick, and therefore many companies didn’t even bother to have a human resources department.
But times have changed. At some point, perhaps connected to the evolution of service industries and the rise of tech companies whose value creation depended almost exclusively on the quality of their workforce, firms started thinking that maybe there was a source of competitive advantage in HR. Companies that reacted to this insight got the upper hand, while for others, the news has taken longer to sink in, and they’re starting to pay the price.
The workforce has also changed. I don’t completely buy into the hype of tags like Generation X and Millennials, but without a doubt the professionals who have joined the workforce during the past 15 years have other values and sets of priorities than their elders. While workers in previous generations craved stability and were delighted at the prospect of working for a company their entire lives, nowadays flexibility, challenge and overall purpose are the main factors driving job-seekers. Mobility, or “job-hopping,” has become a reality as the average tenure has dropped from 4.4 years to about half that among young professionals. The talent shortage, much discussed in the US, is just as real in Costa Rica; having led many recruitment processes and worked with many HR managers here, I can tell you that it is palpable how increasingly difficult it is becoming to find the right people.
Still, in spite of all these changes, many local companies are still using the same bag of tricks to attract the best and brightest. If we were to frame talent as being for sale, we are – and have been for a while – on a seller’s market, though not everybody’s acting like it.
If your current company or your future startup wants to make its people a competitive advantage, there are a couple of things you might need to change. Here are three you can start with:
1. Let HR sit with the big boys
While it is easy to argue the importance of talent attraction, retention, management and development, most local organizations still make HR more an administrative function than a strategic one. In an article on the subject, Jack Welch, GE’s CEO for two decades, pointed that this problem is even more pervasive in Latin America, where less than 1% of HR professionals thought their company gave them an equal saying at the table as a CFO. In a local software company I did some HR consulting for, the second-class citizen status of the department was obvious: “HR can implement any initiative, as long as it doesn’t require a budget,” was the message coming from the top ranks. Under these circumstances, no wonder many HR departments end up being the planners of the monthly party, but not much more.
2. Find new ways to spot talent
We love to take mental shortcuts. It is embedded in our nature and helps us cope with the complexity of life. These shortcuts are often useful, and we rely on the techniques that have served us well in the past to solve the present’s challenges. The problem is that they also are the source of biases or blind spots that can make us overlook the fact that the context or the situation has changed, as is the case with the workforce. The best example of this is some recruiter’s insistence on valuing experience and consistency above all.
In a mobile talent market it is hard to find candidates who have stayed with the same company for years. What’s more, in a service or tech industry where many of today’s jobs didn’t even exist five years ago, it is tough to argue for experience as a hiring criterion. Think instead of transferable skills. What has this candidate done in the past (even if it’s in a completely different industry) that has helped her develop skills useful in the present position? According to Claudio Fernández-Aráoz, the key trait you should be looking for is precisely “portability,” or the ability to effectively transition from one role, company, industry or country to the next, bringing unique strengths to each. This requires some out-of-the-box thinking that I have yet to encounter in most local recruitment teams.
3. Have a long term approach
Most companies think about talent when they have a position to fill. As a result, they usually find themselves without processes or tools to manage the inflow, filtering, testing, communicating, hiring, and developing of candidates. Old CVs not suited for the present needs get tossed or filed in a such way that they can’t be found when needed for future openings; interview processes tend to be unstructured and informal; and feedback and test results are not systematically filled.
To start controlling the process, a good place to start is with one of the many recruiting management solutions out there, especially if you hire frequently. You also should think about what makes your company or project a great place to work – and since building those capabilities take time, the sooner you start, the better. Given that today’s potential employees are increasingly more drawn by the mission of the company, how interesting and challenging the job will be and what kind of impact they will have on society, the values you build your company culture around and how you communicate that to the job market is the basis of your attractiveness as an employer. That, however, must be managed with the same care you would the positioning towards your customers.
There’s no doubt that the talent shortage is a reality worldwide. But we can make it a lot easier if we adjust to the changes and start improving our old ways to tackle the challenge.
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Randall Trejos works as a business developer, helping startups and medium-sized companies grow. He’s the co-director of the Founder Institute in Costa Rica and a strategy consultant at Grupo Impulso. You can follow his blog La Catapulta or contact him through LinkedIn. Stay tuned for the next edition of “Doing Business,” published twice-monthly.
