Recruiting Good Employees in a Tight Market

This article was published in the Central Penn Business Journal, November 5, 1999

Ira S. Wolfe
Guest Columnist
President, Success Performance Solutions

Ira S. Wolfe is president of Success Performance Solutions. Regular Small Business Columnist Amy S. Blough is on vacation.

Smart managers are rethinking the impact that too many jobs and not enough employees will have on the way they do business in the next decade. Thriving companies understand that recruiting, training, and retaining employees is no longer an administrative function, but a competitive strategy. And one thing is for sure. The imbalance between the supply of skilled jobs and the demand for qualified workers will not go away.

How do we know? The 25 to 34 year old age group will shrink by nearly 25% in the next decade. The 35 to 44 year old age group will decline by nearly 15%. To put this in perspective, the oil shortage in the 1970's was caused by only a 5% shrinkage in worldwide supply. Compare this to a 15 to 25% people shortage and you get the picture.

There is some good news, however. Generation Y, the demographic group to enter the workforce in the first decade of the 21st century, may mirror the surge when baby boomers entered the workforce in the 1970's and 1980's - with several distinct differences. Latinos and Asians will represent more than half of the US population growth every year for the next fifty years. In fact, the population of non-Latino whites may shrink to a bare majority by 2050. And by 2005, 85% of new workers will be women, Hispanic, Asian, Latino and immigrants.

What will this mean for business owners and managers? Preparing your business to recruit and retain employees will require very different strategies and an acute understanding of different cultures, needs and priorities. Not only will new job candidates look very different in the next fifty years but the dearth of entry level employees in today's market translates to a scarcity of qualified people to manage and supervise entry level employees in the future.

What's a business to do?
1. Recognize good people when you see them. In a recent issue of Harvard Business Review, only sixteen percent of senior managers were confident they could identify the differences between their high performers and low performers. As a result, managers really don't know good people when they apply (or why good people leave.) The first step in finding good people is knowing why your good employees perform up to your expectations, why their behavioral style blends in your workplace, what motivates him or her to do well, what values they share with you, what expertise they know, and how much potential they have to grow.

2. Create the Irresistible Business, a super-pleasing culture that attracts the best customers and employees. The challenge for thriving businesses will be to market their business to prospective employees as a best place to work, just as businesses market to customers as a best place to buy.

3. Introducing poorly motivated employees into a workplace of competent, skilled people can be devastating. How do you feel when you are surrounded by people who are less motivated than you are? And how motivated are you when surrounded by people who slow you down and interfere with your results? The choices are clear. Mixing productive employees with under-performing "warm bodies" only de-motivates the workforce and feeds turnover. Select employees who fit your culture, share your values, and have a positive attitude. Hiring "warm bodies" just to fill open positions is a very shortsighted solution.

4. Your most valuable asset is your people. How much would your business be worth without the people working in it? Microsoft is now the richest company in the world and their biggest capital asset is knowledge and information. Who creates, controls and dispenses the information - people. Smart business owners and managers are now including human resources on their financial statements, as an asset, not an expense or liability. Invest in your people.

5. Current employees are your highest probability prospects for growth. The return on investment of training the right people can be as high as ten times greater than investing in capital improvements.

6. One of the most efficacious things a manager can do is match people with jobs that play to their skills, behavioral style, motivations and values. Making a good job match requires managers possess rich and detailed information about their employees. Pre-employment and professional development assessments are not only cost effective, valid, and legal but also a prerequisite for protecting your human assets and your bottom line.

Hiring and selecting employees the way "we've always done it" will threaten to derail many currently successful businesses. Managers who continue to make hiring and retention decisions based on prior successes will typically limit their growth and under-utilize their capacity in the future. The ultimate choice - you can keep drilling for "people wells" knowing the people supply is low or create a workplace that attracts the best candidates, like water flowing downhill.