McKinsey and Co: the War for Talent

1. Create a winning value proposition for talent.
2. Elevate talent to a burning corporate priority.
3. Source talent broadly and creatively.
4. Develop talent aggressively.

Create a Winning Value Proposition for Talent

Creating a tempting proposition for individuals is paramount for attracting the most talented individuals. In short, it involves tailoring the jobs on offer to appeal to the type of individual an organization wants to attract.

Chambers et al believe that talented individuals are attracted to two things: the company brand and products. The brand constitutes how outsiders view the culture and values embedded in the organization so this must be managed and tailored to make sure that it is an attractive proposition to the individuals which they want to attract.

The product of a company wishing to sell itself to talented individuals is, essentially, their jobs. McKinsey has formulated the seven main characteristics that constitute a great job:

1. Elbow room to allow individuals space to maneuver.
2. Head room to allow them to take responsibility to make important decisions.
3. A clear link between business activities and business results.
4. A position that stretches but does not defeat.
5. A position that offers them something new to work on as often as possible.
6. Great colleagues.
7. Highly competitive compensation, particularly long-term wealth accumulation.

Elevate Talent to a Burning Priority

As with all initiatives of this kind, the battle for talent must be given full support throughout the organization, starting at the top. McKinsey suggests that leadership groups should be directly responsible for applying standards for talent to the top 200 to 500 executives. This involves assessing existing talent with regular, effective, overarching performance reviews.

Chambers et al also suggest a change to the way organizations view and define the human resource department. They argue that the talent war requires a more dynamic, proactive department than is the norm in organizations today. Important features of the new style department are individuals with business credibility, and a stronger relationship with other departments.

Source Talent Broadly and Creatively

The third stage of the transformation for battle in the talent war, is developing a more effective method of identifying what is wanted from talent and how to find it.

Chambers et al suggest developing detailed profiles of the type of individuals that the organization intends to recruit. One method of doing this is by analyzing the characteristics of current high performers, and trying to match them with new recruits. Examples of characteristics might include university, degree subject, language proficiency or whether they served in the armed forces. Once this has been decided, the organization can either seek ready-trained recruits from other organizations or develop them internally.

McKinsey also suggests that talent winners do not only recruit when positions become available. Rather, they are looking for talent continuously and recruit when they find a suitable individual. Excessively fast growth should be accommodated with outsourcing of executives as well as promotion from senior management.

Develop Talent Aggressively

The final stage of McKinsey’s talent retention and development program is the aggressive development of talent. This involves a number of suggested stages. The first suggestion is to put individuals with potential into positions that they are not deemed ready for. Chambers et al believe that when faced with an important job, too many organizations look for individuals that can do the job now, rather than those who have the potential to rise to the challenge and develop as a result.

The second suggestion involves ensuring that an effective feedback system is in place. Survey results show that only a small percentage of the executives asked view informal feedback and coaching in their organization as effective, but 75% believe that it is an effective development tool in general.

The third suggestion is that organizations should constantly address and understand the retention problem. Focusing on the leading executives can make the middle and lower ranking managers feel left out and insignificant. If these individuals are not recognized for their performance, it is likely that the highest performers are the ones that will leave.

In another article in The McKinsey Quarterly, two years after the original article, the war for talent was addressed again. In ‘The War for Technical Talent’, Bodden et al presented the results of a survey that specifically focused on 5,000 computer science and electrical engineering graduates at top universities.[4] They found that professionals who specialize in technical areas were increasingly looking to smaller businesses for employment, which means that those looking to find talent in larger organizations were looking in the wrong place.Furthermore, the average time that individuals remain with their first employer after graduating is getting shorter. According to Bodden et al, around 50% of those who graduated between 1971-1990 left their first jobs within three to five years. For those who graduated between 1991-1993, more than two-thirds had left after the same time period.

In another follow up to the seminal War for Talent survey, Axelrod, Handfield-Jones and Welsh surveyed a similar number of managers in 2000 to ascertain whether the 1997 findings still applied.[5] The answer was a resounding ‘yes’, with 89% of those surveyed agreeing that it is more difficult to attract talent than it was three years before and only 7% reporting that they believed their organization had enough talent to pursue. The survey also showed that the highest performing companies outperformed the industry’s mean return by 22 percentage points showing that although talent may not be the only factor affecting performance, it remains one of the most powerful.

All McKinsey consultants acknowledge that the transformation towards a talent-rich organization is not an easy or quick proposition. However, it is clear that those that employ a system that effectively identifies, acquires and nurtures talent will reap the benefits of having one of the most important assets that an organization can have in the 21st century.