Episode Transcript
Speaker 1 00:00:11 I just listened to a podcast where an economist called this, the Take This Job and Shove It Economy <laugh>. And to be honest, there's a lot of truth to that. So let me talk a little bit about why you have to build an incredibly strong employment brand right now and what's going on in the labor market and warn you in a sense that if you don't deal with this issue, you're gonna find yourself fall behind economically and financially as a company. The first thing is, as most of you have read in lots and lots of articles, there are millions of jobs being created, roughly 14 million in the United States right now. So job seekers, people looking for work are starting to get a sense of confidence that there are more jobs out there now, they're not all in the right city at the right wages, and there are certainly people looking for work, but the general sentiment among the workforce is, I'm willing to leave the job I'm in and try to find something better.
Speaker 1 00:01:09 And the way we know that is the quit rate, which is the percentage of people who leave their job every month, is it the highest I think it has ever been? 2.7 over 2.7% of Americans quit in May, which is almost 4 million people. Now, why would somebody quit their job? The main reason they quit their job is because they think there's something better out there, and maybe they're just fed up or tired or bored. If there's anything the pandemic did for all of us is it made us reexamine our life and think a little bit more about where we want to go next. And maybe if we're not enjoying the work we're doing, it's time to look around when all these wonderful reports come out about how many jobs there are, it gives you confidence to leave. In addition to that, we also know that at least 30%, some statistics say 40% of Americans did change jobs in the last 18 months, or they changed roles or they changed managers, or they changed responsibilities because of the pandemic.
Speaker 1 00:02:07 Everybody's job changed, fewer Working in a Starbucks or a grocery store, not only did you have to wear a mask, you had to deal with deliveries of products and services. You had to deal with people coming into the store, arguing with you about whether they should wear a mask and your general work was more uncomfortable than it was before, just from the physical standpoint. So if you thought you could find a better job, it wouldn't surprise me that you would move. And many of our clients who we talked to in the early stages of the pandemic who did a lot of furloughs and laid a lot of people off, told me that while they expected most of these employees to come back to work, a lot of them are scratching their heads and saying, I'm not sure if I want to come back to work.
Speaker 1 00:02:49 Now. The second topic is employment brand in general. During times of a tight labor market like we have now, one of the things that drives your ability to recruit is not how much money you're paying or what kind of benefits you provide, but your brand. And brand is a vague term, but relative to a job seeker, it's a job seeker's perception that your company or your job is going to be great for them. Now, nobody really knows when they take a job, if it's gonna work out, nor of does the employer really know if the employee's gonna work out. But if they get a sense from their peers, from their friends, from the website, from articles they read, from the products they buy that this is a great company, they're gonna want to come work for you. And they pick that information up in many, many locations, they might go to Glassdoor, they might go to LinkedIn, they might talk to people that have worked there.
Speaker 1 00:03:42 They might talk to your recruiters, they might look at your website, they may buy your product and see if it's any good. There's a lot of things people do to get to know an employer, and whether you are responsible for all of these things or not, if you're an HR person or an HR leader or a talent acquisition executive, you have to think about all of those things because every time a poor article is written about your company or a Glassdoor rating is poor, it does affect the potential for a great person to come work for you. Now, the flip side of that, of course, is a lot of the way you hire great people is through going out and finding them, contacting alumni, contacting references and referrals from people inside of your company, talking to people that have applied in the past, looking at people inside the company that have left that might want to come back.
Speaker 1 00:04:31 And it turns out from some of the research data we just got from Eightfold, almost 40% of the hiring in the largest companies in some of the bigger industries, financial services, healthcare, pharmaceuticals, manufacturing, are now coming from either internal candidates or referral candidates. And that's a symptom that it is getting harder to find people. So of course, one of the big things that's really important right now is improving internal mobility. And I've been doing a lot of podcasts and articles on that, and you all probably know a lot about that. So in addition, burnishing your employment brand, you do need to go out there and look for people, and that means that recruiters who are sometimes not fully understood by the HR domain are really important. Which leads me to my third point. Let me talk about recruiting. We're in the middle of a pretty interesting research study on the talent acquisition space.
Speaker 1 00:05:25 It's very, very complex. As you know, there's lots of technologies, there's lots of ai, the focus on recruiters, hiring managers, COEs, outsourcing, many, many aspects to the market. But of all the things we've studied and all the companies we've talked to, the recruiter always comes up as one of the most important parts of the equation. Now, lots and lots of vendors and articles have been written about why we wanna automate recruiting and get rid of the role of the recruiter. Well, I, I hate to say this, but that's not gonna happen. We can automate the way people apply. We can automate screening, we can automate background checking, we can automate scheduling of interviews, but recruiters play a critical role. It's sort of like saying, we don't need salespeople in the company. We're just gonna put together a great website and make it really easy for people to buy things.
Speaker 1 00:06:14 Human beings want to talk about opportunities. They wanna understand your company. They don't know what's going on inside of your company. They don't know why this opportunity is good for them. And of course, your hiring managers wanna know why this person is a good candidate. Recruiters have this magic ability to match candidates to jobs. I remember interviewing the head of talent acquisition for one of the largest oil companies many years ago, and we were talking about how hard it was at the time to hire exploration and production engineers and PhDs in chemical engineering and oil and production are very rare. There's only something like less than 10,000 in the whole world. So if you wanna hire great engineers that know how to go out and find oil, which used to be a big deal, and it probably still is, you've gotta fish in a pretty small pool, which means the odds are if you can't get somebody out of college or maybe a graduate student to come work for you, you're gonna end up poaching somebody from another oil company.
Speaker 1 00:07:12 Well, this head of recruiting said to me, of all the things we've studied in how to attract those great people and all of the tools we have at our fingertips, including pay bonuses, career programs, employment brand, et cetera, he said the number one thing of all is the quality of the recruiter. And he said, not only do we know statistically that the quality of the recruiter directly impacts our ability to hire great candidates, we also know that if you look at that candidate five to 10 years later if they were highly successful, it always goes back to that great recruiter. So recruiters don't only understand how to talk people into coming to work for you. They genuinely understand the fit and whether somebody's going to be good match with your culture, your job, your company, your industry, and all the various things you're working on.
Speaker 1 00:08:02 So what do we need to do with recruiters? They need help. They need training, they need information. They need relationships with hiring managers. We need to give them easy to use tools. In fact, L'Oreal, who's one of our large academy clients, told us that of all the things they wanna spend money on right now, training and engaging recruiters is number one. And I think that's a really, really smart decision. The fourth thing I want to talk a little bit about relative to the labor market is data. There was a very interesting merger. It really was an acquisition that was announced this week, and that was the acquisition of mz EM s I also called Economic Modeling by Burning Glass. Now, burning Glass is a aided company located in the northeast that started out many, many years ago as a resume parsing software company. And they found that that particular industry was becoming a commodity.
Speaker 1 00:08:52 And so they pivoted and became a data company and they realized they had really good software to identify and scrape job descriptions and job postings from the public internet and AMAs an enormous database of jobs. Now, what do you do with a big database like that? You can look at trends in job titles, trends in trends in skills, trends in experiences. There's actually a lot of important information that comes outta that database. And so Burning Glass started developing analytics tools and selling that data to public policy makers, local and state governments, and many of you in recruiting and simultaneously another company out in Idaho by the name of mz did the same thing. Now, it turned out that MZ was a little bit of a better software company, and a lot of the tools and aggregated analyses and offerings that MZ built were things that Burning Glass aspired to have.
Speaker 1 00:09:46 However, burning Glass had a larger customer base and deeper pockets. So Burning Glass ended up buying mz. Now, why is this relevant? Because that combined company, which is now called Burning Glass mz, which is a little bit of a mouthful, is now a very large provider of data about the job market. And I would suggest that if you're a big company and you're hiring hundreds of people, you probably need to look at data of the jobs that you believe you need over the next 3, 6, 9, 12 months. Where are the people that would be good fits for those jobs? Where are they coming from? What roles are they in today? What adjacent jobs have relevant skills for those jobs? What are the job titles that you should use to most likely attract those people? What are the job titles that your competitors are using to attract those people?
Speaker 1 00:10:34 What are the levels of those jobs that are available in different parts of the market or in the labor force or in your competitors? That's really, really important data. Now, LinkedIn sells some of that data through their Talent Insights product, but the Talent Insight product was really designed as an off-the-shelf solution, mostly focused on employment brand. The MZ Burning Glass company will be able to sell you data or give you analysis. It's much more specific. One example, a large healthcare insurance company we worked for with for many years hired MZ to look at all of their job descriptions in the nursing and healthcare related roles in many of their service centers. And they found a bit of a mess. And they used the MZ database to consolidate and streamline those job descriptions, move them to titles that are most likely to be successful in the markets they serve, and move the job openings to the cities where they're most likely to attract those people.
Speaker 1 00:11:32 We did an interesting study with mz, which we're gonna continue, which we call the tribes of hr. And we actually did an extensive analysis of all this data for HR professionals. We happen to identify 14 tribes, 14 groupings of HR people. Those groupings are related to their experience, their academic background, the types of jobs they had. For example, people that do payroll and data processing are not the same as the people that do learning and development. They're not the same as the people that do recruiting. They're not the same as the people do technology. They're not the same as the people that do legal compliance and diversity and inclusion and so forth. And it turns out when you look at those tribes, they're located in different cities. Some cities have a lot of people in one area of hr. Some cities have a lot of people who are in another area of hr.
Speaker 1 00:12:20 It's somewhat historic based on the universities in those cities and where large companies located their workforces. But if you happen to be looking for somebody in Tribe A and all the people in Tribe A are in Minneapolis and you're in Houston, you may have a hard time finding them in Houston and you might wanna locate them in Minneapolis or open the job rack in Minneapolis. And so that whole issue of how you use that data to recruit is really important. And by the way, that kind of data should be used on an ongoing basis to look at your workforce and your team and make sure that they're at the right level and at the right skill level as your peers. And to some degree, those companies can help you with that. Not completely, but to a large degree, they can be helpful. The fourth issue or fifth issue I want to talk to relative to the labor market is this whole issue of job design and employee experience.
Speaker 1 00:13:09 If you go back to that idea of take this job and shove it, why do people leave jobs? Well, there's all sorts of reasons. I hate my manager. I'm not going anywhere in this company. I'm underpaid, I'm poorly treated. I don't like the work, I don't like the commute. There's a lot of reasons. The problem you have as an employer is you have to get rid of all those reasons. You have to find a way to take all the people in your company and minimize the number of irritations they have coming to work. And that, in a sense, is what employee experience is all about. We are actually launching a big program on hybrid work right now and also finishing this massive study on employee experience. And as I was talking to some people about it, I realized there's essentially two possible ways to think about employee experience.
Speaker 1 00:13:55 One is you can have a fairly grandiose view of the problem. Look at Maslow's hierarchy, start at the top and focus on mission, purpose, career aspirations, and do all sorts of really exciting things to attract people to your company because it is a place to fulfill your dreams. The second is you can do the opposite of that and you can say, what is it about our company that's really bugging people? What are the things that drive people crazy? Where do we have high turnover? Where do we have poor performance? What can we do to flatten the problems to make our company a better place to work? Now both of those are great approaches, but the second one sometimes is better. And if you wanna attract great people to your company, now's the time to do it. Let me give you a very specific example. We're about to launch a very interesting case study of Bank of America, and I'm gonna spend a lot of time talking about this because Bank, bank of America is a really an exceptionally well run company.
Speaker 1 00:14:53 And John Jordan, who runs this group is responsible for a group called the Academy at Bank of America. And what it is, it's an end-to-end talent and development organization affiliated with the consumer bank. The consumer Bank of America is 70 to 75,000 people, hundreds and hundreds of branches, and they don't know how many accounts they have, probably millions of consumer accounts. They deal with credit cards and bank accounts and safe deposit boxes and all those things you need to run your life. And when he first took the job, he came out of the business, he looked at some of the talent metrics and he found that the turnover rate was extraordinarily high. And I won't tell you what the number is, but it's in the report. Louie dug in and he found that one of the reasons the turnover rate was high was that the first year or so, one to two years was exceptionally hard for new employees.
Speaker 1 00:15:44 Those who could make it through the first year or two stayed a long time and their performance went way up as their tenure increased. So there was a basically an exponential growth curve of performance versus tenure. But the problem was the first couple of years was really hard to get people to stay. So he looked at what was going on and how they were recruiting people, and he found all sorts of wonderful programs and employment, brand interviewing programs and university outreach programs and events, but they were happening in sort of a haphazard way. Many were managed locally by local teams and local cities or local geographies or local branches, and people would come into the bank, they'd join, they'd go through a long onboarding program sort of by themselves. And it's hard, a lot of things you need to learn about banking, about systems, about technologies and tools, and you don't make a lot of money working in a bank, certainly not at an entry level job.
Speaker 1 00:16:36 So a lot of people would just leave. And right now, as the job market is competitive and there's lots of companies offering more money, somebody would say, ah, this is kind of a hard job. I'll just go find something else. Well, what he realized is that he could fix that. So systemically, as you'll read about in the article, in the report, they went through a program of changing the way they recruit, changing the way they develop people, aligning the first year or two experience to a very specific set of learning and development, organizational goals, bringing people into the company in cohorts not as individuals, making sure people had mentors in coaching, setting up service centers to track employees during their first two years so that they knew they would be successful and would get feedback on every stage of their growth. And of course, then helping them transition from first level roles to more senior roles over the next few years so that they would grow into ever increasing responsibilities in the bank and give the bank a leadership pipeline.
Speaker 1 00:17:32 And as you'll see when you read the report, the results were absolutely unbelievable. The retention rate increased by orders of magnitude. The performance of the bank has been fantastic, and Bank of America has done extremely well and continues to be extremely successful through the recovery of the pandemic. And I honestly believe the bank's gonna be a great growth stock over the next few years because of this. And my point is that you have the opportunity to do these things in your company. Employee experience may feel like an opportunity to boil the ocean and work on all sorts of interesting technology projects and develop a hybrid work strategy and buy Zoom and Teams and Microsoft, Viva and Workday and everything else. But that's not really what it is. What it really is is an opportunity to take individual roles or or important critical workforce segments and make them more productive and make their work experience better.
Speaker 1 00:18:24 And if you do that, you're gonna make it easier to hire people. So for a company like Bank of America that's gonna be growing a lot as the economy picks up speed here, they are now positioned to grow. And I don't know their position relative to other banks, but I would be willing to bet that the work they've done on EX and building out the Academy is gonna turn out to be a massive competitive advantage for them. I guess the last thing I'd leave you with is the very important issue that in a labor market like the one we're in right now, not only do you have to make your company attractive and retain people and work on productivity and employee experience and brand and the skills of recruiters, but you also have to connect the talent acquisition function to the learning and internal talent mobility function.
Speaker 1 00:19:11 One of the things that's been really interesting to me about HR over the last couple of decades is how big the market for career and internal development and internal mobility has become. And in a world where it is hard to hire, one of the best tools you have fulfilling a job is to find somebody inside the company who wants that job. And even if that person inside the company isn't qualified yet for that job, they might be a better fit than an outside supposed expert. And so that's the last thing I'd leave you with is in addition to really burnishing your entire recruiting and talent acquisition and recruitment and brand, make sure you're really taking a good look at internal mobility and caring for the people you have inside the company. Take this job and shove it might be a reasonable way to think about the economy right now, but that doesn't mean we're not gonna deal with it. This is an opportunity for you to make your company even better than it ever has been and realign your entire HR function around the need to attract and retain the best people in the market. Thank you.
