The War For Talent: Beyond Compensation

In interactions with a large number of executives over the last several months a majority listed the “war for talent” as the major issue anticipated in the coming year.

I’m only a closet economist and too often the door is closed and the light is off, but I’ll bet the last beer in my fridge that low unemployment and constrained immigration will no doubt lead to several things on a macro level: More investment in technology and higher wages.

There is something, however, that few economists report. People leave jobs (or stay) for many reasons, and wages are absolutely part of the equation, but not at the top of the list. Peruse the data and you’ll find that many people leave their jobs because of relationships and the environment (i.e. culture).

Not a news flash, right?

So here is the tough question: What are you doing about it?

Whether or not you actively managed or created it, there is a culture in your company. Is it what you want? Does it support your strategy? Will it help you win the war for talent?

Likewise, everyone seems to understand that high engagement (I prefer the word commitment) has financial benefit and leads to retention of those you most value. What formal program or plans do you have in place for increasing commitment? Do you measure it?

You don’t “do” commitment to your people. Rather, you create an environment that builds commitment. You sure as hell can’t get commitment by demanding it. You can demand compliance but that won’t incite them to go the extra mile for the benefit of the organization. Compliance is not commitment.

I’ll bet that many of you are having discussions with your human resources teams or fellow executives about the war for talent. You are probably thinking about increasing wages, and that very well might be a good idea. Perhaps you have a large chunk of earnings in a foreign country and are planning to repatriate it and planning to invest in your people.  Regardless, take a good hard look at your culture and the level of commitment in your company.  Wage wars are like price wars – a race to the bottom.

There is always someone ready to pay a bit more than you, but once you’ve built a positive culture with a high level of commitment, you have a real sustainable advantage.