The Game Is On…


ROI by Frank J. Rich






By Frank J. Rich

If your organization has an enlightened view of opportunity, it is (no doubt) building a meritocracy — a value based system of rewards that elevates human capital. These days that means that you’re likely in a war for talent. And if you’re not, you may be facing a conundrum that damns the innocent. The “best and the brightest” are increasingly rare, and like sliced bread, everyone wants them. But the talented, unlike sliced bread, are harder to come by. If you’re not looking further than your recruitment ad in the local newspapers, your dreams of a productive society of “knowledge workers” busily building the future of your organizations may be a “sugar plum vision” with no ties to reality.

Alternatively, you may be thinking that the “homegrown” approach is best, and have begun efforts to grow opportunity and an “execution culture” in your organization by an investment in personal development. It’s the right stuff. Sadly, organizations too quickly lose their energy for this as well, leaving the choice between talent acquisition and growth the whimsy in this corporate porridge. Both are necessary, both are right — you choose!

Talent — the fulcrum issue
“Talented people need organizations less than organizations need talented people.” This may sound a little bold, but would warm the cockles of the late management guru, Peter Drucker. Technology plays an increasingly significant part in this drama that has seen the traditional contract between employer and employee change — a permanent job in exchange for an employee’s loyalty to the “knowledge worker” of Drucker’s imagination — who holds the means to production in his hands. The lifespan of an organization/company is 30 years; a different market model has made obsolete the norm of the last century in which the company outlived the worker. Today’s worker will serve 50 years in the workplace, outdistancing his employer by 20 years.

Some have called this “Karl Marx’s revenge” in suggesting that computers are the modern day means of production. They are now in the hands of the common worker that literally means, “cheap enough to buy, small enough to house, and easy to operate.” A dramatic example of the influence of the ordinary worker is the so-called pajama revolution. Bloggers have repeatedly outflanked the mainstream media on domestic political news, and social networks have replaced newspapers and magazines as the forum for conversation among individuals with common interests. Glenn Reynolds, a law professor at the University of Tennessee, with no background in the media, enjoys up to a half-million page views a day for his blog —

Not coincidentally, the more open a society becomes, the more available the means of production, the more “an aristocracy of talent will replace an aristocracy of birth.” It’s obvious where the talent in a society lives — with those who are educated and with means. This does not diminutize “nature,” but rather, reveals the benefit of “nurture” as a disequilibrating force in individual achievement.

Simultaneously, organizations are losing many of their advantages, such as job stability, security, and healthcare benefits. Even those with a yen for the old are finding it difficult to provide. Half of America’s 100 largest industrial firms in 1974 had disappeared by 2000. The very diversity that large organizations use to spread risk may have transferred to individuals by the power vested in the tools of capital improvement — computers and the talent to innovatively employ them. Consequently, fewer people are finding sustenance in the corporate world. Job tenure among the most stable age segment of the worker population (54-65) shrunk from 15.3 years in 1983 to 10.2 years in 2000.

New business starts in the U.S. (pre-recession) skyrocketed; some 50,000 each month hand out their business cards. The percentage of one-man firms is enormous, and growing at 4-5% per year. The upshot is a steady decline in the number of people willing to wear the “company collar.” Some 40-50% of workers openly express their interest in moving to a different company, and roughly 40% of middle managers have regular conversations with recruiters. Even top-level managers change organizations frequently on the way to the top, further demonstrating the talent necessary to great accomplishment. Youngsters, too, are typically in demand. Given a stable economy, unemployment among college graduates is low, enabling a greater sense of their own worth. In some part, this is the result of increased information about employers and salary experience across industry segments. Clearly, the internet is responsible for this awareness.

The talent magnet
Most in business are familiar with the term, UVP. Unique Value Proposition is the raison d’etre of product and service groups, and the solvent that greases the skids between seller and buyer; add value to the customer and s/he is “sold” more easily. Organizations that are struggling to answer the question: “How do we attract and keep the best people,” as are most, would do well to adopt a form of this equation commonly referred to as EVP. Employment Value Proposition is the new PERK in corporations, and it is quickly turning organizations, worldwide, into practitioners of what behaviorists call “white magic.” Listening, as it is commonly known, to the motivations of its people has replaced the employee handbook as the way organizations predict workers’ behavior. This is because few actually know what is in them, even though they are signed as a condition of employment.

Organizations still hold sway as the choice of those building careers; even superstars come to realize that their success is largely the result of the mechanisms that come together uniquely in larger organizations —the intellectual stimulation of working with others, the sense of belonging to those around you, even the sacraments of office life. Further, organizations are fonts of the talent that fuels growth and opportunity. Clearly, organizations have advantages.

So what must organizations do to attract the talent they seek? First among equals, the Corporate Executive Board (CEB) argues for a focus on EVP. Compensation and benefits are an important part of the mix, but a friendly culture, accomplished and talented co-workers, and the potential for personal growth and opportunity weigh heaviest as motivators for today’s corporate confrère.
After a study of about 90 companies, the CEB concluded, “the rewards for managing an EVP effectively are huge, increasing a company’s pool of potential workers by 20% and the commitment of its employees fourfold. It can even reduce the payroll: companies with well-managed EVPs get away with paying 10% less than those with badly managed EVPs.” But there is work to be done; roughly, three-quarters of new recruits believe organizations fail to deliver on their promises, after attracting them to full-time employment. This may contribute to the annual survey results that mark 70% of organizations as dysfunctional.

It suggests that organizations put more effort into defining their EVP, says the CEB. Most human resources departments emphasize their organization’s achievements — past and present — but potential employees are more concerned about culture, personal growth and opportunities, and earning potential. Understanding the needs of the local market is important; Midwest employees are most interested in health and retirement benefits, while technology workers in the San Francisco Bay Area emphasize innovative product and equity sharing as important determinants to where they work. And the mode of message delivery has changed too. Since workers put more faith in what past and present employees say, companies must go beyond typical recruitment ads and institutional advertising, and reach out to prospective employees through social networks — associations, health clubs, community service organizations, and the like. Champions are often used to encourage their friends and social contacts to consider employment with them.

Winning the talent game
The most effective thing organizations can do to attract talented people is to encourage long-term employability. And the best way to accomplish this is to create a learning culture. This not only builds loyalty in workers, but also fosters an execution culture. According to one survey, 94% of those questioned thought that it was they, not their employers, who were responsible for security. However, workers do expect employers to help them grow their skills set. It sounds simple enough, but the reality is that very few organizations deliver the training and development they aspire to. The average company in America invests only $800 per employee per year in learning and development (LD). Anomalies (which are rare, indeed) are companies such as Chase Media Group, which spent over $1700 on LD per employee in 2006, and doubled that in 2007. On average, companies provide LD for only two-thirds of their employees.

To improve the effectiveness of LD may require that organizations use peers to conduct learning sessions. The informal nature of this approach works best, according to a survey by Deloitte, where “67% of respondents said that they learn most when they are working with a colleague, with only 22% saying that they do best when conducting their own research, and only 2% were happiest with a manual or a textbook.”

Clearly the best way for companies to win the talent war is to become learning organizations. Sadly, very few know how.

Frank Rich is founder and CEO of Encore Príst International, an organizational development company that helps individuals
and organizations reach their full potential through the practice of effective business fundamentals. You may reach him at, or by phone at 866/858-4EPI.

April 20, 2021 |

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