Before the 2008 financial crisis, the biggest challenge facing A/E firm executives was finding enough qualified staff to meet growing workload demands. The resulting recession solved that problem temporarily. Now firms are hiring again, with staffing levels nearing prerecession levels and the talent shortage rearing its ugly head again.
Perhaps it's time to rethink your firm's approach to competing for top talent. Here are five steps that I think are essential to getting the edge in recruiting:
1. Define your value proposition. Why should someone consider working for your firm? The better candidates have options these days, so you should determine how to differentiate your firm from the competition. Can your firm pass the comparison test?
You need to understand your value proposition. What can your firm offer that most others cannot? Tough question? Well, in a tough talent market you can bet candidates will be asking it, at least indirectly. So you need to come up with the answer. At a minimum, you should address the following factors that today's workers value most:
- Workplace environment. Do you offer personal attention, flexible hours, a supportive boss, effective teamwork, interesting work? Can you provide any evidence (e.g., employee surveys, workplace awards) that yours is a special place to work?
- Career development. Does your firm have a strong training program, clear career paths, active mentoring, ongoing performance feedback, meaningful incentive compensation? Can you make a compelling case for your firm being a great place to build a career?
Yes, the standard is high. That's why the process of developing your value proposition is so important. You need to determine what your firm can realistically do to distinguish itself in the competition for talent.
2. Create recruiting-oriented marketing materials. With your value proposition in hand, you now need to communicate it effectively. There are two primary audiences for your message: (1) specific candidates you are pursuing and (2) unidentified prospective candidates out in the marketplace. Both can be served by targeted marketing assets such as your website, brochures, fact sheets, social media, and videos.
One reason firms struggle in this area is because the HR department is handling it versus the marketing department. What's needed is a cooperative venture between the two functions—or the use of an outside consultant if necessary. Keep in mind that promoting your firm to prospective clients and to prospective employees involves much the same messaging. So it shouldn't be viewed as diverting the marketing department from its primary task.
Committing a portion of your website to recruiting or having materials on hand for job fairs are no-brainers. But here's another option to consider: Take recruiting materials to conferences and trade shows where you are exhibiting. While clients are the usual targets at these venues, many of the attendees are also potential employees. And your firm may be one of the few that are marketing for candidates as well as clients.
3. Commit to a "we find them" approach. There are two basic recruiting strategies (to borrow John Sullivan's terminology): (1) the traditional "they find us" approach that amounts to placing your ad in various places hoping to attract qualified candidates, and (2) the "we find them" approach that involves identifying and actively pursuing the people you want. Many firms in our business use the latter approach in part when they hire a headhunter. But they are often uncomfortable with doing direct recruiting themselves, especially where it involves competitors (see this post exploring the ethics of direct recruiting).
I'm convinced that the passive "they find us" approach will become increasingly inadequate as the talent market in our business tightens. So how will you find the people you need? Much the same way that you find clients. With clients, you identify who you'd like to work for and actively pursue them through a sales process. A fundamental difference with prospective employees, of course, is that most aren't advertising their availability like clients do through solicitations for proposals.
In fact, most potential employees aren't even looking. One recent study found that only 30% of workers are actively looking for another job. That means only a small percentage of potential candidates are going to see your ad no matter how widely you broadcast it. If they're not looking for you, you need to go look for them. The best place to start is to leverage existing relationships.
4. Leverage relationships for recruiting purposes. Your greatest recruiting asset is your employees who know people. They all have former colleagues and classmates, friends, neighbors, and family members among whom some could become a valuable addition to your firm—or a valuable resource in identifying candidates. The secret is getting employees actively engaged in the recruiting process. I know, most firms offer a referral bonus for this purpose. But most lack a true "recruiting culture" where everyone is constantly looking for candidates to join the firm.
This gets back to having a genuine value proposition. Are your employees passionate about your firm? That naturally spills over into their active engagement in recruiting (with a little direction). At my last place of employment, I was among the many who felt we were working for the best firm in the business. So without prompting, we pursued friends and former colleagues who we thought not only would be great hires, but would be grateful for the opportunity to join our firm. We were successful in hiring many of them, without having to resort to casting the net for unknown candidates. How many does your firm hire through such relationships?
An important point is this: Begin transitioning from activity-driven recruiting to relationship-driven recruiting. Sure, there's a lot of things you should be doing. But a critical goal of your recruiting activity, as it should be in business development, is to develop strategic relationships.
5. Offer a competitive compensation package. This one's pretty obvious. I only mention it because many firms, for various reasons, struggle to keep pace on salaries and benefits. Small firms often find it difficult to compete. Same for firms that provide mostly cost-sensitive commodity services. Other firms are constrained by high overhead. The problem of salary compression will continue as the competition for talent intensifies, driving up the cost of labor and throwing existing pay scales out of whack. Plus A/E firms will increasingly be competing with other industries—where average salaries are higher than what we pay.
Solutions to these problems are elusive and beyond the scope of this post. But you'll have to deal with the challenge nonetheless. Here are some suggestions:
- Pay for high value. In other words, be willing to invest above the norm for special talent. This is particularly true for those who have demonstrated ability as practice builders, seller-doers, market insiders, or dynamic leaders. Focus on ROI, not just qualifications and pay scales.
- Deal with underperforming employees. What does this have to do with recruiting? Paying for underperforming employees limits your ability to pay for better performers. Plus they occupy positions that could be more capably filled by others. Of course, one of the reasons we don't let poor performers go is we're afraid we won't be able to find suitable replacements. That's another reason to be continually recruiting, regardless of openings. Keep the pipeline full and you'll have more options.
- Consider alternative staffing options. I've explored some of these in previous posts. For example, build your capabilities in part with independent affiliates, self-employed professionals or college professors who can add credentials and capacity without the risk of hiring full-time employees. Teach administrative staff to handle more project tasks. Develop a role for paraprofessionals, similar to what law firms have done with paralegals, to perform work that doesn't require degreed engineers or architects. Perhaps you can expand the capacity of your current project managers—good ones are hard to find—by delegating much of their work to others.
- Close the gap with incentive compensation. This involves offering a lower base salary with the opportunity to earn above-average compensation through performance-based incentives. Generally, this option appeals only to a small segment of prospective employees, but they tend to be top performers who are confident of their ability to maximize their pay. For this option to gain traction, you usually need to meet the following criteria: (1) the base salary is within the median range of the industry, (2) the earning potential through incentives is substantially above the norm, and (3) the performance metrics are clear, objective, and reasonable.
While compensation is not the most important factor in hiring and retaining talent, it is still important. If you simply cannot compete on salary, you'll have to compensate with a compelling value proposition. In that case, you want to have the candidate "hooked" on the advantages of joining your firm before the subject of compensation even comes up.
So how many of these recruiting essentials does your firm have in place? Yeah, several of them aren't very easy to implement. Welcome to the escalating talent war. It's not going to get any easier for the foreseeable future—which you can turn to your advantage with the right strategies!