I first heard the term ‘War For Talent’ in around 1998, as a young Research Manager working in the field of culture and employee research – an area that was really starting to take off at the time. The term was coined the previous year by Steven Hankin of McKinsey & Company, and popularised in a 2001 book of the same name by Ed Michaels, Helen Handfield-Jones and Beth Axelrod1.
The book’s title referred to an increasingly competitive landscape for recruiting and retaining talented employees. Michaels, et al., describe not a set of efficient HR processes, but an employee mindset that emphasises the importance of talent to the success of organisations.
Some years later (mid 2000s), I was working with Sony Ericsson, helping them build a new global Employee Value Proposition (EVP), and once again the recruitment and retention challenge became apparent as the global nature of the work meant that we had to take into account a number of specific factors:
- Shortage of skilled labour globally – emergence of new economic powers, aging populations in Europe, US and Japan, and the competition for experienced and skilled employees had intensified.
- Shortage of skilled labour in key sectors – especially in regard to IT, programmers and telecoms expertise.
- More with less – there was high pressure to cut costs and increase productivity and profitability, meaning recruiting the right people was imperative: skilled employees get things done quickly and efficiently.
- Growth and profitability – recruitment and retention were becoming more critical in the fast-growing world of telecoms, and employees with the right skills, knowledge and experience drive growth were in high demand.
- Strength – how attractive the company is perceived to be will drive its bargaining power for the best talent. Sony Ericsson was a new partnership, formed by a merger of two distinct cultures.
Recruitment and retention was therefore a key factor for the company. Telecoms was a burgeoning sector, with the development of the mobile phone market, even before Apple changed the game with the first iPhone in 2007. It was becoming apparent to many organisations that people were key to achieving organisational goals, and employees being seen as ‘assets’ was a thing of the past. The EVP programme and the materials we produced were critical to Sony Ericsson and other organisations at the time in accessing the people they needed.
Fast forward to early 2022, and it is incredible to see how the economy and job markets have heated up so quickly when 2020 and 2021 were the years of lockdown, and business and personal struggle. A new competition for talent has emerged, but this time it is driven by the demands of those seeking different things from employers, rather than employers seeking employees who fit into their culture. We have seen a shift in power away from employers towards employees.
Employer and employee brands are key to retaining and attracting employees. Your employer brand is how the outside world sees your organisation as an employer. It’s based on how you treat your employees, how the employees feel about working for you, and the culture of the organisation. Obviously, this is important in drawing in new talent, as the brand has to be attractive, and tell a compelling narrative of why your organisation is a great place to develop a role and career.
In an employee-driven market, where there are literally thousands of available positions in most disciplines (there were 1.2 million vacancies in the UK at the latter part of 2021), the reputation of the organisation is key, both from a brand and marketplace position, and the reputation in terms of how employees are treated. Reputation websites such as Glassdoor play a big part in this.
The employee brand is based on a number of factors, but first and foremost, it encompasses the experience colleagues have in working for the organisation, which, in turn, dictates how they think, behave and perform.
It’s no surprise that organisations with a strong consumer brand, strong employer brand and positive employee brand continue to recruit the best people and receive the most speculative job enquiries.
Getting the message out into the marketplace that you are a great employer means creating an effective employee value proposition (EVP). The EVP is the experiences and offerings provided by an organisation in exchange for the skills, capabilities and experience an employee brings to their role. In the world of talent communications, the EVP is the foundation of an organisation’s reputation as a place to work: it is a personal promise to potential recruits and employees.
As well as making you seem unique and desirable as an employer, your EVP also has to be true and authentic, as over-selling the organisation can be damaging to the brand. Traditionally, your EVP should ideally offer five elements:
- Organisation: culture, leadership, purpose and direction, etc.
- Opportunity: development opportunities, career growth, company growth, etc.
- Work: role alignment, innovation, work life balance, location, etc.
- People: camaraderie, teamwork, management quality, etc.
- Rewards: compensation, health benefits, retirement benefits, vacation, etc.
In the past, focusing on these key elements was usually enough to create traction in the market-place and make the organisation an attractive proposition for both current and future employees. However, in the post-pandemic world, a number of related factors have become key differentiators and attractors:
- Employees want to work for organisations that have a purpose, and values that challenge and resonate with their own. So, if your values are non-existent, or have simply lived on the wall of your reception area for years, you need to dust them off and reinvigorate them.
- Office-based employees want choice in where and how to work. Many do not want to give up the freedom and empowerment they have felt from working from home over the past two years, so flexibility is key. This may mean that organisations redesign their workplace not by job roles, but by task. For example, if a particular task requires collaboration, that is likely to be done face to face in the office. If the task in hand is creating a report that requires concentration, potentially working from home is likely.
- The move from employee engagement towards a more holistic employee experience. Engagement has become limiting for some who want to create and design experiences, as opposed to simply measuring engagement. Organisations now have a deeper understanding of the motivations of why people work where they do. How employees feel about the overall experience is driven by the way that the organisation responds to particular moments in the employee lifecycle. Those that make the biggest impact are called ‘moments that matter’. Organisations have to demonstrate to current and prospective employees that they respond and listen, and that they facilitate and manage the employee experience.
- Trust was always important, but is now a key currency and an implicit demand. Leaders are expected to lead the organisation, visibly and proactively. Equally, leaders must trust their managers to engage and manage their teams effectively, and managers must trust their teams to be productive. In employee opinion surveys, trust is nearly always scored average to low, so it is a key area to look at.
- Health and wellbeing have come to the fore. Most organisations were very quick to address health and wellbeing issues and initiatives during the pandemic. Now they must be careful not to lose that focus as we head into a post-pandemic world. Organisations need to clearly demonstrate that employee wellbeing is a top priority, thought about holistically across the organisation.
A new world
A rare positive from the pandemic is that it’s given organisations the opportunity to reset the world of work, to address the new and different demands of current and prospective employees, and the chance to take another look at how they do things.
Whatever sector our organisation operates in, and whatever our size, we all need to invest time and effort into our employer and employee brands if we’re to stand a chance of winning the best talent. It’s a different world to what any of us have seen before, and organisations must be nimble and responsive to the demands of this new talent market.
To talk about how to create or improve your organisation’s EVP, or to discuss any other issues around employee experience, please drop me a line: Ian.Barrow@corporateculture.co.uk
- Harvard Business Press, 2001 ISBN 978-1-57851-459-5