HOW TO: Win the War for the Most Talented Employees

Dan Finnigan is CEO of Jobvite, an SaaS platform for the social web that companies use to find and hire people. You can follow him on Twitter at @DanFinnigan and read his Jobvite Blog.

In 1997, McKinsey, the leading business consulting firm, published its famous study and book “War for Talent,” predicting a multi-decade shortage of skilled talent in the U.S. economy. We all know that wars are most often fought over scarce and important resources. Talent is certainly one of them.

Automation, reengineering the organization, outsourcing/off-shoring work, freelancing, allocating work online and crowdsourcing have not eliminated employer dependence on hiring full-time, high quality talent. Despite the recent prolonged period of high unemployment, companies still see a limited supply of, and a rising demand for the talent they need. And they can expect this “war for talent” to last a long time.

Nowhere is this clearer than in the San Francisco Bay and other pockets of innovation across the country like Austin, Texas. Last month, the news was dominated by the story that Google offered 10% pay increases and holiday bonuses of $1,000 for every employee. Google’s arming up for this “targeted” war for talent as new startups continually try to poach talent from top companies — taking a page out of Google’s playbook from five years ago.

Among my company’s San Francisco Bay Area customers, new job openings on a company by company basis are up an average of 17% in the last three months. The technology sector is not the only one ramping up hiring. Corporate profits are back near an all-time high, and companies are sitting on nearly $2 trillion in cash. As businesses gain confidence in the economy, some of this cash will be translated into jobs. Skirmishes are breaking out all over as a result of a long-term struggle for high-value resources that isn’t going away.

Good News for Some

Even during the recession, we’ve seen unemployment is not an equal opportunity. The unemployment rate for workers with less than a high school diploma has typically been three times that of those with a college education. A recent report from the American Society for Training and Development (ASTD) shows where we are headed: In 1991, fewer than 50% of U.S. jobs required skilled workers. By 2015, 76% of U.S. jobs will require highly-skilled workers, e.g. those with special skills in science, technology, engineering, or math. 60% of new jobs will require skills held by 20% of the population.

That adds up to a targeted war for talent in specific occupational, educational, industry and geographic sector — good news for the in-demand workers but not for the businesses that need to hire them.

Job Seeker Nation

The talent shortage is combined with a new attitude among the most in-demand sectors of the workforce. To understand more about job search intentions and practices in today’s new employment climate, my company recently conducted a nationwide survey of 2,000 people called “Job Seeker Nation 2010.”

The results make it clear that workers conditioned by a long recession do not believe in job security and now feel they need to be prepared at all times to find a new job. We’re rapidly evolving into a nation of free agents where “players” jump from team to team within shorter time periods. In fact, 53% of all working Americans surveyed -– representing about 63.5 million people –- aren’t actively looking but are open to a new job. These are not “passive” job seekers; they’re active in networking and positioning for advancement. They’re “proactive,” laying groundwork for their next professional opportunity before they have to look.

Who are “Proactive Career Managers?”

Proactive career managers are younger, more educated and earn higher salaries than other segments of the workforce. 73% are age 18 to 44, 52% are college grads or post grads and 34% earn $75,000 or more annually.

They are more active in social networks (77% use Facebook, more than one third use Twitter and/orLinkedIn) and have more social network contacts than other groups. They are more likely to have found their last job through a referral (36%) or social network (16%)

Always Be Recruiting

Now that job seeking is a constant activity among high-skill workers, you as an employer need to generate a similarly proactive attitude toward recruiting in your company. Early on, one of our investors advised me to “always be recruiting.” In practice, it means investing less in short-term fixes and one-off searches, and more in long-term assets and your own pipelines of talent.

If you approach hiring now no differently than you did two or 10 years ago, your company will lose the battle. Like today’s workers are always looking for the next gig, you need to adopt some new methods to ensure a steady pipeline of talent. You can’t just post jobs online and hope great people apply.

The good news is that the Internet has made identifying and finding people easier than ever before. However, it’s also easy for your competitors. Some thoughts on winning the talent war:

• Companies have to build relationships with a large number of people, networking in the same way individuals have to network.


• Target the sectors of talent you need in the same way marketers know they must target prospects, then stay in touch until the time is right to hire.


• Set the tone for hiring from the top –- the most successful company talent networks are headed by executives who make it a priority to recruit for their companies and motivate others to do the same.


• Just as it’s usually cheaper to keep a customer than acquire a new one, it’s more cost-effective to retain good employees than search for new ones. Companies have to keep recruiting their own employees, because if you don’t, someone else will.

The real key to winning is engaging your prospects –- and your current employees –- with a mission, a culture, and a sense of ownership. The targeted war for talent is a battle for hearts and minds. Are your troops and weapons trained to win?