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Incendium’s White Paper Series – ‘The war for talent’ by Partner Jeremy Brattle

Oct 30, 2017

Is this the beginning of the end of the ‘war for talent’? 

As 2017 is drawing to a close, we may finally be starting to witness the final phase in the notorious and lengthy ‘war for talent’ that for so long organisations within the corporate real estate industry (and outside it) have sincerely fought. In response to cultural shifts and technology, are organisations willing to cease fire and adopt a new approach to talent attraction and retention, based on principles of collaboration and transparency? Or, in the face of new recruitment challenges, is this a naïve solution too ambitious to overturn the secretive and ‘protective’ instincts under which the market has long operated?

What is the ‘war for talent’?

The term ‘war for talent’ is a term coined by Steven Hankin of McKinsey & Company in 1997 and refers to the competitive landscape for recruiting and retaining talented employees; it is widely accepted in corporate parlance and is regularly debated in various forums, conferences and workshops, often alongside the discussion around how the millennials or ‘generation Y’ will expect to work and how best to ensure that corporations are able to attract and retain that talent. I believe it is a fascinating and wide-reaching topic which is helping to accelerate some much-needed innovation in the recruitment world, and is leading many organisations to fundamentally challenge long-accepted recruitment norms.

How the landscape has changed – the workforce of 2017

When the phrase ‘the war for talent’ was first introduced to the industry, the primary focus was on competition surrounding the very top of the talent pool – how companies could ‘fend off’ their competitors and secure the most highly desirable corporate players in their fields. Fast forward to 2017 and the term is now commonly accepted to refer to the wider workforce, inclusive of those other than just the professional elite.

Most organisations now recognise that the behaviour and expectations of this 2017 workforce is changing, leading companies/employers to evolve in their outlook regarding talent. Some of the key components of this radical shift are outlined below…

The 2017 workforce is:

  • Increasingly demanding more flexibility in terms of how they work and greater diversity in terms of who they work for, the type of work they do and when they do it.
  • Less concerned about job security and more interested in the quality of work/life and the ability to learn and develop new skills to use on their next challenge.
  • Increasingly embracing ‘independent working’ (freelancing/contracting) as an attractive, alternative way to make a living, which is fuelled by changing mindsets and enabled by significant improvements in technology and the increased availability, affordability and suitability of flexible/co-working styled space.
  • Increasingly demanding ‘portfolio careers’ to gain new skills/experiences.

How are companies behaving today?

With rapid advancements in technology and the digitalisation of business, many companies who were previously confident of their business strategy and trajectory over a five year plus projection are now unable to forecast further ahead than two to three years. This, coupled with the changes in workforce profile outlined above, has a potentially significant impact on hiring strategies, career pathing and talent development. Some of the changes in behaviours that we are increasingly witnessing amongst corporate clients include:

  • Shorter term strategic goal setting: digitalisation is leading companies to articulate shorter term strategic goals, owing in part to the uncertainty about the future shape of the business. This translates into organisations no longer being as able/willing to offer ‘job for life’ security, with a pattern emerging of shorter term contract-based assignments becoming more evident.
  • Creating ‘programmes of work’: in line with the above, there is a growing trend for company-set work activities to be packaged into ‘programmes of work’ with short and medium-term objectives.
  • Inter-company collaboration: we are seeing the emergence of an increasingly collaborative mindset that is accepting/embracing of the new more ‘open and transparent world’ (see below).
  • Ensuring there is access to quality, flexible resources: companies are increasingly acknowledging the requirement for quick access to quality, flexible resources to deal with the peaks and troughs of demand, and are setting up networks in anticipation.

The above shifts in corporate approach represent a significant change in the ways in which companies operate. Not only must organisations evolve to incorporate these new ways of working, it must be remembered that these changes are taking place against a backdrop of constant pressure to reduce cost base and deliver right sizing, and a demand for diversity of talent (i.e. the hiring a truly diverse skilled workforce rather than ‘more of the same’).

Moving to collaborative working – the beginning of the end of the ‘war for talent’?

Perhaps the most interesting development highlighted above, which is being explored by employers in some industry sectors, is the concept of ‘talent sharing’. Even as a concept, this approach is a remarkable shift in thinking from the employment market of old where secrecy and concealment were (and still are) common place and talent was ‘protected’ from the market in as many ways as possible.

The idea is still evolving, but it’s simple and attractive on the surface – groups of companies with similar cultures and attractive ‘brand values’ will collaborate to create, in essence, a virtual talent community or ecosystem of quality, flexible staff with transferable skills that are attractive to all corporate members. The talent would have a track record with one or more of the corporate members, thus presenting advantages to both parties: employees would have access to opportunities across the whole community and employers will have access to a ready pool of proven and previously vetted staff.

Delving deeper into its practicality, quality levels could be controlled by setting pre-agreed performance criteria which would need to be met in order to be accepted into the community and then managed via an ‘Air B&B’  styled feedback system that could work both ways; poor performing candidates and/or employers/managers would quickly become evident, as would top performers. Corporate members could also agree to a standardised vetting/on-boarding process thereby speeding up this often lengthy process, and in addition could help to ensure the on-going loyalty of the community and reduce costs by offering/providing access to shared benefits or services, perhaps at attractive rates versus non-members (financial advice or products, career planning etc.).

The idea of collaboratively sharing the pool of talent therefore appears to have distinct advantages and could work on a practical as well as theoretical level, however there are clearly many challenges to overcome to make this a reality: governance, regulations, data protection, IP issues, funding etc. to name but a few. It also clearly won’t suit/apply to every level, sector, function or profession; for example, it would be difficult to imagine competing real estate firms sharing their best advisers, brokers or consultants, but they may be willing to collaborate with some of their long term corporate customers on some form of rotational graduate programme, exposing their best graduates to different businesses, improving their networks, accelerating their learning, etc.

What appears certain is that the technology exists to support the creation of a data management system to capture this new collaborative community, and the appetite for change from both the employers and the talent is very real. It seems likely that we will soon witness this type of structure being piloted by some significant and influential employers in the real estate industry and outside of it; perhaps initially starting with a graduate scheme as a basis for the model. What remains to be seen is how effectively we eradicate the often deep-rooted instincts to keep the very best talent to ourselves and embrace this new open, collaborative way of working.

Nov 16, 2017

Incendium’s White Paper Series – 'Managed to death' by Partner Steve Norris

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