The War For Talent: Beyond Compensation
In interactions with a large number of executives over the last several months a majority listed the “war for talent” as the major issue that they are concerned about in the coming year.
I’m only a closet economist and too often the door is closed and the light is off, but I’ll bet the last beer in my fridge that low unemployment and constrained immigration will lead to several things on a macro level: more investment in technology and higher wages.
We should embrace economics as business leaders, but also psychology. People leave jobs (or stay) for many reasons, and wages are absolutely part of the equation, but not at the top of the list. Peruse the data and you’ll find that many people leave their jobs because of relationships and the environment (i.e. culture).
Not a news flash, right? Everyone seems to know this. So here is the tough question: What the hell are you doing about it?
Whether or not you actively managed or created it, there is a culture in your company. Is it what you want? Does it support your strategy? Will it help you win the war for talent?
Likewise, everyone seems to understand that high engagement (I prefer the word commitment) has great financial benefit and leads to retention of those you most value. What formal program or plans do you have in place for increasing commitment? Do you measure it?
You don’t “do” commitment to your people. Rather, you create an environment that builds commitment. You sure as hell can’t get commitment by demanding it. You can demand compliance and put a gun to peoples’ heads but that won’t cause them to go the extra mile for the benefit of the organization. Compliance is not commitment.
I’ll bet that many of you are having discussions with your human resources team or fellow executives about the war for talent. You are probably thinking about increasing wages. It might be a good idea. Perhaps you have a large chunk of earnings in a foreign country and are planning to repatriate it and willing to invest in your people. Regardless, take a good hard look at your culture and the level of commitment in your company. Wage wars are like price wars. They are a race to the bottom.
There is always someone ready to pay a bit more than you do, but once you’ve built a positive culture with a high level of commitment, you have a real sustainable advantage.
Todd Ordal is President of Applied Strategy®. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He is a former CEO and has led teams as large as 7,000. Todd is the author of, Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be (Morgan James Publishing, 2016). Connect with Todd on LinkedIn, Twitter, call 303-527-0417 or email firstname.lastname@example.org.