Talent will Determine the Fate of Any Organization
Recruitment as we know it is changing rapidly. The pandemic, that brought with it the hybrid work model and the Great Resignation has made it challenging for businesses, especially in the IT industry, to hire and retain good talent. According to the Bureau of Labor Statistics, the IT employment market in the United States gained an average of 13,000 positions per month in the first half of 2021.
The US unemployment rate edged down to 3.8 percent in February of 2022 from 4 percent in the previous month - a new pandemic low and below market expectations of 3.9 percent.
But this is not a unique problem that business leaders are facing today for the first time. The labor market has been witnessing an acute shortage of good talent for a few years now.
So how can businesses close the demand and supply gap of finding talent and retaining it today?
The answer lies in the two major phenomena manifesting simultaneously - the ‘Great Digitization’ and the ‘Great Resignation’. As Microsoft reveals, the ‘Great Lockdown’ has shown the power of digitization to the world. It has led to greater digital adoption across major sectors of the global economy.
This shift is so impactful that it would not be an exaggeration to say that, “…all companies are now software companies…”. This has, in turn, created a very significant (10x) demand for talent that can further drive digital transformation.
With the ‘Great Digitization’ came the ‘Great Resignation’.
The Great Resignation, on the other hand, is nothing short of a movement in the West. More than 3% (4 million) of the US workforce resigned every month – as of December 2021. The movement also recognized a hashtag called #quitmyjob on TikTok. Even companies with a good reputation for employee satisfaction, such as Amazon, lost more than a third of their workers due to safety and related issues during COVID-19. This only reflects that the expectations from employees towards their employers and workplace have evolved.
This means that talent acquisition and its retention must be perceived through a new lens. The pandemic changed the levers of top line growth with the push to digitization opening up opportunities for the tech industry like never before. This changes the market dynamics around hiring completely.
For instance, in the pre-pandemic era, B2B tech product companies had to invest millions of dollars and a considerable amount of time in making their clients understand the benefits of digital adoption – creating demand. That was how the technology-adoption bell curve was born. Sales cycles were lengthy, sometimes ranging from 6 months to 1 year. Thus, sales team productivity and efficiency played a major role in driving top line growth.
Fast forward to the post-pandemic world, almost all companies have already understood the benefits of digitization, and are now waiting for the right technology solutions for a company-wide adoption. At present, the biggest bottleneck is the pace at which tech companies build and ship mature and relevant solutions for global businesses.
A perfect example depicting this phenomenon is the growth and adoption of Microsoft Teams against its competitive counterparts. They were able to win a significant share of the market in a very short time, mainly because of innovative features, relevance, and the ease of use. The current market will be won by the companies who focus on building, shipping, and deploying relevant technology products at a much faster rate. And to do that, it is inevitable for technology companies to ramp up their hiring of top talent.
The singular point I want to make is that, given the circumstances, hiring top talent will act as a major lever for top line growth.
However, it is easier said than done. For decades, companies have considered the sales/marketing function as a major growth driver, whereas hiring and other HR-related functions were regarded as a cost for the company. It is this mindset that hindered the evolution of the hiring function vis-à-vis how sales and marketing functions have evolved. A lot of investment and innovation has happened to make sales and marketing highly efficient and productive. But being a cost centre, hiring innovation has been limited to the bare minimum.
Hiring functions across global organizations are broken. I will cover this topic in detail in an upcoming article, but for now let's keep our focus on why hiring should be a top priority. Apart from a few tech giants like Amazon and Google, none of the SaaS companies have been able to sort their HR function. It has been neglected, and has received lesser priority than it deserves.
I have heard these arguments several times -
“A Recruiter’s time is not as valuable as an interviewer's time.”
“Companies do not want to add another cost item in the Hiring department.”
“Why should we automate processes when recruiters are not that expensive and they can handle it manually”
…and so on.
The problem is not that the companies neglected the HR function in the past, but their present mindset that is so deeply ingrained in their companies’ DNA. The need of the hour is to change their perception to consider the hiring function as a top line driver of growth and revenue. With the overall shift to go remote, moreover, I believe that the focus should be towards investing more into innovations that drive HR efficiency.
According to a recent article from the Wallstreet Journal - the hardest job to recruit for is other recruiters… So, the first step to solving the hiring problem is adding an army of competent recruiters.
The salaries of recruiters have grown significantly from USD 75k to 125k. All signs are indicating the great mindset shift that is now imperative towards the talent function.
As new age leaders like Guy Kawaski or Naveen Tiwari have noted, once the mindset is set right, products and solutions will follow. What we need in tech is for the talent function to be more streamlined, efficient, productive, and people-centric.
