Stop Overlooking this Talent Pool
If you read employment headlines, you know the importance of creating a competitive advantage with a targeted, aggressive hiring strategy - typically focused on external candidates. I believe too many employers are overlooking one of the critical talent pools available to them: their current employees.
Building vs. Buying Talent
In the past, many employers struck a balance between hiring internally - building talent, and hiring externally - buying talent. Over time however, as Peter Capelli’s recent HBR article has documented and described well, the external hiring buying of talent has increased dramatically across the board.Naturally, entry level roles were and still are/should be filled from the outside. However, are you buying talent outside for positions well above entry level? All of the time? About half the time? The idea of scrutinizing and carefully tracking your “build/buy ratio” is critical to tapping into one of the most powerful talent banks available to you - your current employees. Do you know your build/buy ratio? Are you going outside more than half the time - a build/buy ratio of 40/60 or 30/70, or even 20/80? For which roles? These ratios can be acceptable for a time - typically in hyper growth stage startups or expansions. But even those, as organizations mature, will benefit enormously by building their own “homegrown” talent pipeline, at least for certain jobs, levels or departments. The right ratio is different for each company, but it starts with tracking where you are and knowing where you would like to be.
The Proof is in the Posting
It is rare to find a job posting these days that does not require multiple years of prior experience in an extremely specific niche. This is what recruiters call a “purple squirrel” - something that simply does not exist. These wish lists are not only unreasonable, but they cause you to believe there is no one relevant inside to consider for the position, when in fact there may well be. Rather than hiring these expensive unicorns externally, employers would often be better off placing a bet on someone internal who is a fast learner, can learn on the job and will go the extra mile to prove they were worth the risk. There are several advantages of internal versus external candidates which are often overlooked while drooling over fancy external candidate resumes. Your current employees already know your values as an organization, how to navigate in the culture, how to get things done, how best to communicate, what behaviors get rewarded or punished. They can hit the ground running, rather than spend half a year getting acclimated to your organization. Even more important, you know so much more about your employees than you will ever know about an outside candidate - not only their strengths, but you know their developmental needs! News flash: all external candidates have developmental needs too, - they are just not visible on a resume.
Vicious Cycle Hiring
Vicious cycle hiring looks like this: When we fill a majority of jobs from the outside - especially at manager levels, many jobs will be filled by new hires who inherit teams. These teams have to “train” their new leader, which - don’t get me wrong - is sometimes the perfect solution. But all too often, internal team members may begin to feel undervalued, underdeveloped, and overlooked, wondering why they weren’t considered for the position. If this situation continues consistently for the majority of jobs filled, employees get the message that they must leave in order to grow, learn, and get ahead. There is an overwhelming body of data which links employee development to engagement and retention - here is just one example. Without investment in learning, growth, and development, employees begin to feel that the organization is not investing in them. When employees feel you’re not invested in their development, they are less engaged in work, they start looking elsewhere for their next opportunity. This leads to new unplanned vacancies which you again fill from the outside and the cycle repeats, and you are caught once again in a hiring frenzy. Shifting even a fraction of the time you spend on outside recruiting on assessing and developing your internal talent will break the cycle.
This is not to suggest that employees should be given immediate or unearned promotions Employees are not unreasonable,but they do need to sense that you are paying attention to their progress and are interested in helping them reach the next level within the organization. In fact, careers are less linear than we assume, and are typically built from a variety of experiences in order to grow. In fact, offering lateral moves in order to gain a breadth of experience and perspective is another great way to help employees grow without exclusively promoting. As best written by my colleague and well-known career development guru, Beverly Kaye, with co-author Julie Winkle Giulioni, in their latest book Help them Grow, or Watch them Go, the first chapter is aptly titled: “Develop Me or I’m History”.
Change Your Mindset, Break the Cycle
Assuming you’ve read this far, and you’re persuaded...you must be wondering why such an obvious hiring strategy is not more widespread today? The answer is sad yet simple. It’s because there is no quick fix - you were lulled into a false belief that buying outside experienced “ready-made” talent was a quick fix, but the vicious cycle teaches us there is no quick fix.
In order to break the cycle you must adjust your perspective and change your mindset to invest inside. The grass is not always greener in someone else’s backyard.
There are many ways for employers to do this - here are just a few to get you started:
Train managers on how to conduct career conversations, and their role in it. Managers tend to shy away from these conversations because they believe the employee will ask for something outside their sphere of influence. Actually, there is plenty the manager can say or do. In my view, this is the closest to a quick win.
Work with HR to track the build/buy ratio in your company to figure out what percentage of positions at varying levels are filled internally versus externally. Are you satisfied with it? Will it make employees feel like staying or leaving? Is there a gap between where you are and where you would like to be? Awareness and transparency are excellent steps in the right direction.
Take the purple squirrel metaphor seriously, by taking a critical eye - and pen - to assertively editing your job postings. Which qualifications are truly required? Which are preferred? Which can be learned on the job? This will significantly enhance the potential for some employees to qualify as candidates for vacancies.
It is all about demonstrating you are paying attention to employee progress, learning and development. It is not complicated to understand, but it can be challenging to implement well, and will not happen overnight - More actionable talent strategies for another post.