Several ways available to acquire new talent
RECENTLY we had the situation where we sat down with a client who wanted to review his talent shortfalls.
By this, I mean the gaps he had in his staff skill sets. The good thing about it was he was prepared to say to his staff - he didn't have all the answers, and needed his staff to contribute and work together.
This established a great culture for his team to come forward and point out the issues and shortfalls in the business. It also highlighted talent he wasn't utilising.
With that information we decided to assess where he needed to seek out this additional talent. Now often when managers think about HR matters they only think about hiring.
In a recent US report it indicated that 60% of vacancies are filled by outside hires compared to just 10% a generation ago!
This is partly due to the cultural shift from lifetime employment to a more mobile workforce. However, this approach can also manifest results from poor hiring decisions and lack of employee development.
There are three ways to buy talent.
1. You can build it by developing existing employees;
2. You can borrow it by engaging contractors or temporary workers;
3. Or you can buy it by hiring from the outside.
So how do you arrive at the best decision with these three thoughts? One is to start with costs. From the US study - it takes about three years for good middle to upper management to perform as well as their internal colleagues, but it takes about seven years for the pay of the internal hires to catch up with that of the outsiders.
Consideration should also be given to the direct and indirect costs of conducting an outside search. It is a fact that outside staff can often lower morale and create a high turnover - as internal staff get passed over and hence it becomes a much more expensive decision to bring in new talent. It's also more expensive to borrow talent, because of the agency fees and contractors steep profit margins.
At Sothertons, we work with out clients to prepare the best possible approach to developing and attracting the talent that is appropriate for each business.