What Do Companies Overlook With Their Talent Acquisition Strategy?

[ANNOUNCER]: Breaking down everyday workplace issues and diagnosing the hidden sickness not just the obvious symptom, our hosts James and Coby.

[COBY]: Did we lose a patient?

[JAMES]: No that’s just my lunch.

[COBY]: Hey thanks for joining us. I’m Coby, he’s James, so let’s get started with a question. What do companies overlook with their talent acquisition strategy?

[JAMES]:  I think the biggest thing that we see talking with businesses and with the clients that we are supporting is that for many businesses they’re focusing very much on the direct labor pool that they can pull from, right? They’re looking at their competitors, you know, people who have worked with their… in the same industry. That have experience doing the exact job or the exact role that they are looking to fill. And they kind of understand that piece fairly well. What they’re missing is the indirect labor market, which opens up a huge amount of potential for you as a business to capitalize on. Talent that is looking to make a change. And this piece of not understanding or not recognizing the value that comes with the indirect labor market is probably the single biggest thing that we see companies overlook in terms of their strategy and their approach to talent acquisition.

[COBY]: Yeah and I think like we see this a lot when… it’s funny we hear about the kind of restraints that a lot of companies put on what they feel their ideal employee is. And you know, we kind of see, you know, recruiters having their hands tied to this very narrow definition of what success, in this situation, would look like. Because again, it’s one of those things where we probably make some faulty assumptions about what it’s going to take to be the kind of talent we’re looking for. And we think that it only looks like a very… like one way. Or there’s a very simple way that we define what our ideal candidate is. And we’re of the mind that if it doesn’t look exactly like what we expect it to be, then it’s probably not going to be a good fit. And we go after that easy, direct, you know, easy to kind of understand and conceptualize fitting in. Rather than maybe having that broader view, and maybe even actually a stronger view if we take a step back and look at, like you say, kind of the indirect competition or your indirect labor market.

[JAMES]: And the understanding your indirect labor market requires some effort. time, and effort. I mean it’s, I think we default to the experience piece or the ‘I’m looking for somebody with 15 years experience doing this exact job’ because we assume that if they’ve done that for that period of time then we don’t need to worry about their competency in the role. And while that is… there’s some truth to that, it’s extremely limiting. Because it discounts a… Well first off most people are not staying in a single role or with a single employer for 15 years. I mean that’s just, that is not the norm anymore. So if you’re looking for those types or if that’s a prerequisite for you. You’ve already significantly limited your potential and talent that you can attract. People are more mobile in their job, in their career opportunities, looking for options you know two, three years in a role. And people are often looking for the next advancement opportunity. Because we, well I’m going to go off on a divergence if I’m not careful. But really, because we’re not doing a lot to retain people. We force them to have to look at new opportunities in order to get the type of compensation or work-life balance that they need. But entirely separate conversation. Back on the like the long-standing service piece is something that’s going to significantly limit you. And what’s really really interesting is that a lot of people who have left the jobs and are leaving their jobs, are not returning to the same type of employment. They’re not returning to the same like, job titles. They’re not even returning to the same industries. So you have this large influx of people into the labor market who are not looking to go back to the same title, same industry, same profession. That they weren’t they’re looking to take their skills and experience and apply them in a new way that will provide them new opportunities, new challenges. And this is an exciting opportunity for businesses, if you understand that these folks come with a tremendous amount of potential, a tremendous amount of transferable skills, and yeah they may require a little bit more onboarding. Because they might be working in a different industry, but that perspective that they can bring. We talk about diversity of perspective in all forms and even the diversity of perspective of having worked in other industries, other regions, other environments. You can benefit from that.

[COBY]: Yeah I think largely what we’re getting at maybe we should take a step back and do better defining the indirect labor market. I’ll do that in a second, but I think what we’re getting to the heart of what this is, moving past the traditional candidates, and really considering the non-traditional candidate, I think that’s going to be the strength of 2023 and forward is going to be accepting, and almost being excited about the non-traditional candidate. Now when we talk about the indirect labor market, what we’re talking about… like so for example, when we do training and we especially we do training around the Workplace Culture Hierarchy, and we talk about kind of the the bottom stage of Compliance. Where we need to make sure that the factors of our workplace are Competitive, Sufficient, and Equitable. When we talk about Competitive, we often are only looking at “Are we competitive with things like our wages, things like our jobs security, things like wellness programs; with our direct competition in our region?” So if we’re a agribusiness, are we competitive with other agribusiness? Or if we’re a law firm, are we competitive with other law firms? Well the thing though is if you’re only ever looking at being competitive with your direct competitor, you’re totally leaving, kind of like, your flanks open to losing people to the indirect, the indirect competition that you’re going to have, that will pull people that are looking for the same type of skill sets. That kind of overlap, transferable, relatable skills that are maybe not a direct line, one-to-one connection to the job that you have. And this can mean that you’re going to lose people out of your industry. Or also might mean that if you’re smart, you’re going to pull people out of your industry to bring these, you know transferable skills, and these very valuable, often overlooked aspects to how you acquire good talent.

[JAMES]: What I think a good illustration is, several years ago we worked with a group of manufacturers, all in a within the same region. And talent, you know, attracting finding good people. How do I find, how do I fill these positions? This conversation has been going on for ages and it was the same conversation we were having, you know, all those years ago with that group of manufacturers. And looking at, well we can’t by… We’re just poaching from each other. Their solution was well, we’ll just go to the, you know, we’ll grab students out of Community College. And so that we’ve got this fresh pool of applicants. Not realizing that there’s a tremendous number of industries that you wouldn’t necessarily think about as direct competition for manufacturing facilities. I think you actually, if I can give you credit, it really hurts me to do so, but you had a great idea in that conversation around looking at things, like honestly the fast food industry as a indirect competitor for their… to help solve some of their labor problems.

[COBY]: Yeah, because when we work with a lot of organizations in a lot of sectors, we often always try and bring this more broader, typically unconventional approach to Workforce Development and Workforce Strategy. And yeah, so we’re working with these manufacturers who a lot of the time they’re like, well the traditional candidate we want is, somebody with five to ten years of experience, preferably in the manufacturing sector, to be able to kind of fill in for these roles. And so they were like, you said, they were trying to do… their go-to plan was to pull people from community… from college and university, to try and be able to kind of fill in these roles. But the problem they were running into, they’ve always run into, that almost all of them run into, is that when you pull people fresh from school into a hot, dusty, busy, you know, night shift..

[JAMES]: Physically demanding.

[COBY]: Yeah environment, there’s a high burnout rate. And this was the problem, especially when you come to students who are used to you know putting in like a six hour a day, during peak hours, and having all this free time. Having this expectation of 12 hour shifts everything, was a huge learning curve for them. And manufacturers try to adjust for it. But it was always like they accepted that this was always a difficult piece. So part of what we tried to help them do was to create this kind of unconventional strategy, where they looked at the indirect labor market. Like say, construction and agriculture businesses are a great place to pull people that are used to the physical requirements of some of the more physically heavy environments or manufacturers. And then  we talked about the fast food sector was an amazing place to find very transferable skills that would be ideal to be onboarded into the manufacturing sector. Because like so fast food places, a lot of them run overnight shifts, or really hot environments, they’re very fast paced, and they usually have time measured outcomes, and a lot of them even provide some management training. So the idea was people are working in a similar, in transferable skill, a transferable experience environment. But for usually like, you know, for half of the wages that the manufacturers pay. So these people who are working in these fast food places would kill to have you know double, or triple their salary if they move out of the fast food sector, and you have they would probably massively improve your employee retention. But the thing is that you have people who are used to the type of environment, that you’re having… that you’re burning people out with… your retention rates are going to be significantly higher. And they’d be very excited for the opportunity. But this is something that was a was like a really big concept for them to get their mind around. Because they were so focused on the traditional, direct labor market that they weren’t… it took a lot of kind of convincing…

[JAMES]: There were a lot of conversations about this idea. But what was encouraging about it, and what was exciting about it once you know we were able to work through some of those initial limitations, is that, like you said, the biggest problems that they were experiencing with the new employees was that they were not used to the physically demanding job, the 12 hour shifts, you know four on, four off, night shifts overnight, the whole scheduling piece. There was a lot of aspects of just running a 24-hour manufacturing facility that caused a lot of problems. But here you have this demographic of hard-working individuals who are experiencing many of those same challenges, and  they have long work history being successful in that environment. Yes it’s going to require some technical skill development, but technical skill development is so much easier than soft skill development. Or you know trying to change how people in, you know, whether or not somebody’s going to actually respond well to shift work. Whether or not somebody’s going to respond well to the physically demanding or the extremely the variations in temperature. Whether it’s really hot, really cold, you know, all of these physical aspects that were causing huge amounts of challenges. You’ve kind of already used it as a testing ground to weed out the people who can’t handle that, and it led to higher success rate. Yeah and that’s just it, is that the idea of looking at our talent acquisition strategies as very traditional. And you know success only looks, has this one look is one of those things where again and it binds the hands of your recruiters. It kind of limits your opportunity to bring in different perspectives, but most importantly it leaves you open to kind of having your talent being poached if you’re only ever looking at your competitors, you’re not looking at the indirect labor market, and the indirect competition. You’re going to lose people to places you didn’t expect. Because the manufacturing and looking at like fast food as an idea for talent coming in is a great example. But we also have to keep in mind talent going out, right? Because like so one thing that we saw kind of early, and or kind of like in the during the pandemic, it was a peak of it. We saw a lot of the accounting and finance sector was having a massive issue holding on to people because they’re losing them to small businesses looking for CFOs and accountants and stuff like that. People were leaving the big firms, big accounting firms, and going to work you know as CFOs and accountants and kind of individual businesses, yeah into in totally different Industries. So they weren’t really prepared for that at the time. And that was, what was kind of causing a lot of the issues at that time. But this is the thing that we have keep in mind. You may not be thinking about the indirect labor market, but it is still affecting you, whether you plan for it or not.

[JAMES]: Yeah and it’s funny because we see this in a variety of ways, kind of the same mentality takes shape in a variety of ways. Because I think back to like, we’ve had, a couple years ago we were engaged in a lot of conversation specifically in the legal industry. Talking with folks in that industry around some of the challenges that they were experiencing, you know being able to retain people in it. Actually it was very funny because it was very similar to the conversations with manufacturers of, ‘we just end up poaching from each other’. We just end up stealing people, just end up trading positions. Rather than you know really building in up our labor pool. And when we started talking with more legal firms in this way, one of the common problems that they were causing for themselves is was that they were only accepting applicants who went to certain schools, right? So right there alone you know, you have to have gone to X, Y, or Z school in order to be eligible to work here. Well yeah that’s great, I mean there’s… to show that kind of support to specific programs. But if you’re only ever hiring from the same school, or from the same pool of people, you are going to end up with fairly generic employees. Everybody will generally have the same perspective, the same education, you know they’ve been taught the same things, and they’ve been taught to do those same things in one particular way. And I suppose there’s value in that, but if you’re struggling with your recruitment efforts, you need to start examining your… what is actually needed to perform the job, versus what do you just like to have as an artificial measurement.

[COBY]: And I think one of the problems that kind of comes from that, the question about where are you sourcing your talent from? Like you know what are the schools that you’re pulling from directly is, you’re right, there’s that sense of, like you know, well we want the standardization, we want the quality when they come in. But it also kind of limits the diversity of people coming in, and I mean that from kind of all aspects. Like you know, if every employee, again, success only looks one way. Then you’re limiting everything, you limit every other option. And again, the problems with you know really strict, only hiring certain schools aspect definitely leads to some DEI issues. But I think that the businesses that are appreciating and really valuing the impact of the indirect labor market or the unconventional applicant, or unconventional employee profile, is something that where I think a lot of strength from DEI initiatives and representational hiring all that kind of stuff that’s really going to make a huge difference. Because if we only, again, think success has one look, then we are severely limiting our options, which we’re really limiting our ability to be diverse, and we’re severely limiting the type of talent and the methods of getting talent that we will need to be sustainable. Because again, it’s something that if we’re only looking… if we’re only doing things one way, and our actual direct competition starts to actually pull in these more diverse people, and starts to pull in these different ways of thinking, and these different kind of transferable talent, and that kind of stuff too, then those traditional mindset businesses are going to be left behind.

[JAMES]: Yeah, I mean the it’s it’s funny to me because we hear like so many people are struggling with finding talent, how do I find the right people for the right job? It is a challenge, let’s let’s not diminish that. But I find so much of the time once we actually start having these conversations with people and start looking at what they’re doing, many of the challenges are self-imposed. And so the question becomes how do we actually address it? How do we change what do? We need to… how do we actually look at our applicant pool differently? And my best piece of advice is to actually to steal from the best practice that we know works, in terms of our Consumer Market marketing efforts, and develop personas. Develop a target audience who are you actually tar… what’s the ideal target audience for your job? Do you understand what your value proposition is in the labor market? I’ve talked about this idea that the Labor Market and the Consumer Market are two sides of the same coin. They operate fundamentally, they operate on very similar principles. And we can use best practice in how, in what we do around Consumer Market, and messaging in terms of customer personas in terms of value proposition, and how we articulate that those tools can be incredibly, incredibly powerful in the labor market as well. Because you still have to market your opportunities, you still have to sell people on why your business is worth even applying to, and if you know, if you focus less on the experience, and more on what are the skills that somebody needs to be successful, and then making allowances for like people coming from other Industries, will be bringing so many other skills along with them that you can utilize, along with their diversity in perspective, their experiences that you as a business owner or manager can really capitalize on. But you really need to understand what that persona is who, what are the needs, and to be able to be successful in that position. What are the skills that somebody needs to have coming in? What can they acquire on the job? And honestly you have to be willing to invest in people. Because if you’re not willing to at least invest in the basic on-the-job training to help them be successful, why would they invest any time in your business?

[COBY]: Yeah because, your 100% right. I mean, I’m going to try to avoid going off on a crazy rant about about training, because I always want to, you know, I’ll lose myself into that idea with the need to train people. But I think that being afraid to train people, or not wanting to invest in onboarding and training and development, is one of the fundamental, I think, mistakes or the causes, I guess, of why we have this traditional view of hiring. Why the manufacturers want someone with at least five years experience in a very similar role, so that way they can step in and not have to, probably they can step in and do the job and the employer doesn’t have to worry about training them. I think because that desire to not train is, I think, the motive why that traditional approach to talent acquisition is so ingrained into the most workplaces. Because we just want someone that can step in with little maintenance, to just do the job and we’ll be successful without having to invest a lot in them. I really think that gets to the heart of it, but we have to accept the fact the world is different now. The traditional one job for 25 years, that doesn’t, that that’s not going to happen anymore. Like there’s stats for McKinsey that they talked about like, I think they’re about a year old, but talked about how much the people are leaving their Industries, and leaving certain sectors because of the experience kind of coming from the pandemic, coming from the lockdowns and everything.

[JAMES]: I think it was something like 36% of workers globally, are not… 36% are leaving but 36% of those who leave who, have left their job, are not returning to the same industry. So your comment Coby about, you know, looking at five years experience in manufacturing, well there’s 36% fewer employees to pull from. You have to look at a new opportunity.

[COBY]: Exactly and the thing too is like the, you know, like certain sectors. I think it was like two-thirds of people in finance and insurance were you know like change the industries and or did not come back to the workforce. And this is just it, so we’ve heard like you know  from numerous workforce or numerous industry, sorry that there’s not enough talent. The talent pool is drying up, that is so wrong. The talent is there but the talent looks different. The talent is gonna… is not a simple Plug and Play. The talent requires some onboarding and some non-traditional approaches to employee personas. That is the cold hard fact. And the thing is that people, why people are leaving is also important to keep in mind too. Because again, going back to kind of some research from McKinsey, they say people are leaving because of a lack of talent development, they’re leaving for a lot, like you know, uncaring and uninspiring leaders, or leaving for, you know, to find more meaningful work. And there’s a lot of culture reasons people are leaving. I mean there’s compensation reasons too, I mean there’s always a compensation reason, but when you look at like five reasons people leave, one of them might be compensation, the other four are going to be about culture. And this is just it, because we want this traditional employee because we don’t want to have to invest in their development. But we also know they’ll fit in, they’ll assimilate, they’ll join the culture that we don’t have to put any effort into developing either. But that doesn’t work anymore. The world is different now, and unless we want to be left behind we have to accept that we can’t use these traditional type, these traditional views on talent and start looking at the more untraditional candidates or the untraditional approaches for talent acquisition.

[JAMES]: Well and I love that you’ve referenced training, and training and development. Because I believe it was something around like 40% of respondents identified that lack of training and a lack of career opportunities were was one of the primary reasons that they quit their job in the first place. If you are not going to invest in your employees they’re not going to invest their time in you either.

[COBY]: Yeah exactly. well we’ll have to make sure we put these stats into the show notes. But I think that if the first part of the answer to the questions, the question; What do companies overlook in their in their talent acquisition strategy? The first part absolutely is the indirect labor market. Realizing that we have to look for the non-traditional view of talent or the non-traditional candidates are going to be key to having a successful talent acquisition strategy. But the other part of the question the answer to the question I think goes back to what you said a little bit earlier about not only relying on experience and having that sense of appreciating skills. Because I think that is what will make us be have a clear understanding of the non-traditional employee. Because the thing is that experience is really just what someone has done it’s their past. Whereas skill is what they can do it’s their present, and their future. And if we’re hiring people because of what they used to do, not because of what they can do, or what they’re going to do for us, then there’s a massive amount of risk in that. But I think the reason why we default to what they have done is, again, going back to the idea of we don’t want to have to train them. So they’ve already done the job, we can assume they can do the job with little training.

[JAMES]: Yeah but a warm body in a chair for 25 years does not mean that that person is competent, right? I’m gonna, so one of the very first training programs we ran years ago we had a comment that has stuck with me, and the we were having the same type of conversation around you know understanding skills versus experience. And we had one of the participants summarize it really well saying “well yeah, it’s the difference between having one year of experience 10 times, and having 10 years of experience, right? When we are hiring for experience, we’re hoping that they have 10 years of experience, not one year of experience 10 times. That they’ve actually learned something over those 10 years, that they’ve been in that role. But there’s no guarantees, it’s just an easier check box to evaluate, than actually taking the time to understand the transferable skills. But it’s such, if we can move our talent acquisition strategies away from what have you done before, to what can you do for me. That is a much better conversation to have it gives an applicant an opportunity to sell themselves to you, not just on what… I’ve had the same role before so obviously if you plunk me down, yeah I can probably warm the seat for another 10 years. If you give me… here’s my background and experience and here’s how I can use my background and experience to help your company achieve X, Y, and Z through this role that I’m applying for. Those are incredibly different approaches to the application process. And in my view I would much rather be seeing applications, applicants writing a cover letter or you know resume, whatever that form may be, telling me that I have this vast skill, these vast skills and experience, they’re looking a little different than the industry that you’re in, but here’s how I can use them to help your organization grow.

[COBY]: Yeah and I think that’s the, again, almost like the comfortable traditional approach that we take to wanting employees to you know have a certain number of years of experience, or enough and so we don’t have to train them. Is kind of the same kind of comfortable, traditional thing that has us wanting them to have you know 10 years of experience on their resume because that part of the recruiting process is much easier, it’s easier to measure of a potential applicant. Well they’ve got a lot of experience so that box is checked. It’s hard to equate their level of skill in the job application process, I mean it’s not impossible it’s just a bit harder.

[JAMES]: It requires, there’s no doubt it requires more effort. It is going it’s a more time intensive process. And if you’re using an automated keyword funneling application system, then yeah, it’s probably not going to work for you.

[COBY]: Or at least it’s not going to work for you unless you put a little bit more effort into it. But this is just like we don’t want to go through the effort of training people, and we don’t want to go through the effort of revising our recruitment and our strategies to account for skill. These are the traditional, I’m going to say lazy approaches, that a lot of talent acquisition strategies have within them. Because again, it’s like ‘well I don’t think the world’s changed, so the old ways will still work’, it’s kind of…

[JAMES]: It’s ridiculous. If we had that mentality, if you took that same mentality and applied it to the Consumer Market you would be laughed at, right? If you took the mentality of ‘well I don’t really want to, I’m not gonna bother creating a consumer profile because I just, I can’t be bothered, I don’t really care. What they’re doing now, I just want to know who’s going to buy from me, I’m not going to put the effort into figuring out my value proposition, because they should just know that, right?’

[COBY]: “I don’t want that I will have to educate my customers on why they need my product or why they’re going to use it”.

[JAMES]: That’s something that sounds idiotic to apply that mentality to the consumer market. So why are we still using this lazy approach to the labor market?

[COBY]: Yeah I mean granted, we are saying it’s not simple, it’s not easy, it’s probably not going to be a cheap thing to  completely change how we’d acquire talent. But it’s the idea of, well this is the investment that you need to take to not be left behind by your direct and indirect competitors.

[JAMES]: And also, recruitment is expensive, right? Turnover is expensive. Hiring the wrong person is expensive. Hiring somebody into a position to having them coast and do them not meet performance is expensive, No matter what you are going, you either invest in solving the problem, or you keep letting your money slip way through the lack of, well we call it Productivity Installation, right? You need, this is one key fundamental way that you can shore up your Productivity Insulation and it starts right from the very moment that you start posting for jobs.

[COBY]: And this is what, and this is, this was the exact argument that we gave to the group of Manufacturers, the number of years ago. Was you can keep going through the cost of recruiting college students and university students to have only 15 to 20 percent of them actually make it to their six-month probation. Or you can invest in changing your onboarding process, and requiring some more training, and refocusing your recruitment or on going after the indirect labor market. And the in the non-traditional candidates that might come from the fast food sector, but retain you know maybe 40 to 50 percent of the amount to the sixth month. It’s the idea of, like you know, you’re you’re going to spend the money anyway, you could spend some money in the short term for better results. You could spend a lot of money in the long term, it’s kind of up to you. And this is just it that we need to be realizing that we’re paying for it anyway, we’re paying money, we’re spent the… monies are getting spent, so the matter of do you want to spend the money wisely and maybe it readjusts to this new world, or do you want to keep hoping that the world’s going to go back to the way that it worked before 2019, and just keep spinning, and just keep you know losing ground to your indirect and your direct competitors.

[JAMES]: Just keep sticking your head in the sand it’ll all work out.

[COBY]: All right I think this was a good conversation. I think I’ll just do a quick wrap up. So the question was what do companies overlook with their talent acquisition strategies? Well largely it falls into two places. One most companies are not considering the indirect labor market and this can look like where their talent could come from. Which could be non-traditional type of candidates, coming from maybe outside the industry or sector, that might have a lot of transferable skills, or be very comfortable in similar transferable environments that allow them to kind of have a higher retention. Or could come from where your talent is going if you’re not competing necessarily with just those who are your direct competition, but people that are maybe pulling from those transferable experiences and skills to pull them out of the sector. Because the question really comes down to what is it that you’re looking for in your target audience or target demographic of potential employees? Do you want to be able to focus on just the experience, where they’ve come from, so we don’t have to maybe invest in their training and development? Or do you want to be looking at the skills what they can do what they’re going to bring to the new job? Because this question of skill versus experience is the other part of the answer to the question. Are we going to be looking for people to bring something to us, with their skills and their future with us? Or do we just hire people based on what they’ve done and hope that that equates to they’ll be able to have a success with us in the long term? Either way is a bit of a gamble, but if we’re only focusing on the traditional candidate, then we’re overlooking diversity, we’re overlooking new perspectives, we’re overlooking the chance to kind of bring something new to our jobs, into our Industries. It is really important for us to realize that if we don’t accept the world has changed, then we’re going to get left behind. All right so that about does it for us. So for a full archive of our podcasts and access to the video version hosted on our YouTube channel visit our website at roman3.ca/podcast. Thanks for joining us.

[ANNOUNCER]: For more information on topics like these don’t forget to visit us at roman3.ca. Side effects of this podcast may include improved retention, high productivity, increased market share, employees breaking out in spontaneous dance, dry mouth, aversion to the sound of James’s voice, desire to find a better podcast…