In a recent article in the Boston Globe, The war for tech talent escalates, Globe Correspondent John Dodge describes the competition for tech talent in Massachusetts as “fierce.” He goes on to say that, “Tech executives describe the hiring environment as brutal – worse even than the dot-com boom in the late 1990s – and a threat to their ability to expand, develop new technologies and keep growing.”
That is certainly quite a statement and reigns true for Massachusetts, as well as other technology hubs in the US. In the Upstart Business Journal by the San Francisco Business Times, the author states that, “…competition for tech talent in San Francisco has gone from intense to insane,” with candidates being wooed and receiving multiple offers from both startups and well established companies in the Bay Area.
What’s the reason for this intense competition for great tech talent?
There are several reasons why this is occurring:
- Professional unemployment rates are very low, at less than 3 percent. This means that most professionals who want to be employed are employed. This creates a very supply short within a demand-rich environment in which the job opportunities are really in the hands of the job seekers, not the employers;
- When you marry this low unemployment rate with high demand and companies that have mission critical roles that they need to fill, it puts real pressure and strain on these organizations to meet their business objectives;
- The situation is further exacerbated and compounded by the fact that baby boomers are retiring in droves. The number of people entering the workforce is much lower the number of those retiring which means there is a dwindling pool of talent;
- And when you further consider the issue, companies are not just trying to maintain their businesses but they are trying to grow, often exponentially!
When taken altogether, the situation can often look grim and there are no easy solutions, especially since economic forecasts point to continued growth for the foreseeable future.
So what can employers due to win the war for talent? We need to start looking at things differently.
As an employer, you have lot work to do and a lot of openings to fill. Or maybe you don’t have a lot but you have a few that require specific expertise and aren’t easy to come by. We recommend the following strategies and considerations. Remember that not every strategy is good for every company but by doing some key analysis and planning, you can improve your odds for attracting and retaining great tech talent:
1. Look at the metrics. Start with the basics:How many people were you trying to hire last year and how many were you able to hire?
What was the attrition rate within your company vs. your competition? Review the outflow or inflow of talent. Are you keeping pace?
Next, move on to look at metrics around productivity and employee value. Let’s use a simple example to illustrate this calculation:
First, look at your revenue. Let’s say your company generates $200M in revenue. If you have 200 employees, we will surmise that the value of every employee is $1M. Now let’s say that your company is trying to fill 40 positions but you have only filled 20. This equals $20M in lost productivity. An organization that is seeing this kind of loss must start thinking about a hiring and retention strategy that can support the growth of the organization.
Other metrics to evaluate:
- Look at your competitors and their positioning in the marketplace
- Rankings and ratings on social media
- Employee reviews
- CEO rating
When companies tell us that they don’t track these metrics or that they don’t matter, it instantly raises a red flag. Employees think differently than they did 10 years ago and with talented Millennials on the scene, it’s critical to participate in the conversation.
2. Evaluate your permanent to temp staff ratio. Do you have a proper mix of talent? Many organizations have been traditionally employee-based but opening things up to contract employees might help you hire faster and gain access to very targeted skillsets. If your company is mostly made up of perm employees with a few contractors on board, how might you be able to adjust that mix to potentially staff to 80% employees and 20% contractors?
This shift also helps to supplement your internal HR team with staffing agency experts who can help to locate consultants while giving them time back to focus on locating permanent employees.
3. Look at your hiring practices. Does your organization have a long, laborious, multi-day, multi-team candidate selection process? If so, you are greatly inhibiting your ability to grab great talent quickly. Here’s why:
- We have already mentioned that the job seeker is in the catbird seat. If Company A conducts 8 interviews with one candidate over the course of 2 weeks but Company B conducts all interviews back-to-back in one day, Company B will win out every time. If your evaluation process is long, you definitely have an issue in the current hiring environment.
- With so much demand for quality talent, there is no possible way that the person you interviewed 2 weeks ago will still be on the market today. These candidates typically receive multiple job offers and are not on the market for any length of time.
4. Take a hard look at your workplace culture and company benefits. Here are a few questions to consider:
- Do you offer competitive salaries and benefits? How about vacation time?
- Does your company offer flexibility in the form of flexible hours and the potential to work remotely?
- What kind of workplace culture do you have?
- What benefits and culture do your competitors offer?
- What are the best practices in the marketplace?
You should evaluate these benefits, as well as how you can continue to foster a positive company culture, throughout the year and compare against your competitors. You should also pay attention to the marketplace: being aware of and considering the latest trends and best practices might help you be more competitive. Think about how you can get on the radar to become a Best Place to Work, get active on social media, and encourage your employees to post reviews out on Glassdoor. If you’re not thinking along these lines, your company is at disadvantage before the hiring process ever begins.
“But I’m not a startup...” and other excuses
Not every company makes a cool gaming app or has foosball tables and free lattes. From financial services to healthcare and from medium sized medical device firms to multinational software corporations, we’re all out there trying to find great talent. Regardless of company size or industry, the key is to utilize innovative employment practices that will enable your business to be more agile and attractive to candidates coupled with a company culture that supports innovation and fosters employee satisfaction. This is truly how you can win great talent and drive company productivity and results.
There are many pieces to this puzzle. What are your greatest hiring challenges? Have you implemented specific initiatives to drive better hiring results? I’d love to hear from you and answer your questions: solutions@eliassen.com.
