Closing the Talent Gap
These are historic times. Last week, the U.S. employment rate weighed in at 4.1 percent — the lowest point in nearly 17 years. Tennessee’s statewide unemployment rate has been in record territory for the past few months, currently sitting at 3.0 percent, the lowest it has been since the U.S. Bureau of Labor Statistics began tracking the information in 1976. Of course, Williamson and Davidson County lead the way, with unemployment of just 2.2 percent, highlighting the power of the Nashville economy. These rates are indicators of strong economic prosperity and, generally, spectacular news, unless you are trying to hire and retain talent.
I recently moderated a group of Chief Financial Offers representing some of Nashville’s most admired and successful businesses. At the roundtable series, convened by Evanta, A Gartner Company, the group grappled with the problem of driving continued growth at a time when hiring and retaining workers is harder than ever. For Nashville, that challenge is wide spread, with a particular focus on young workers and those with specific, often technology-based skills. Millennials now represent the largest generation in the workforce, and they bring much needed energy and expertise to business. However, shifting interests and work habits may make them the most difficult generation to retain. A recent Deloitte study found that nearly 40% of millennials believe they will leave their current employer within two years, and only a third think they will be in the same job for five years. With challenges like these, it is little surprise that Vanderbilt’s most popular executive short course focuses on leading millennials.
The roundtable discussion generated three important take-aways:
• Companies must recognize that career advancement is a key retention tool. This is an increasingly strategic issue as more millennials join the workforce. Millennials in particular crave a sense of movement within their organization from the very start. One approach to satisfying those eagerly seeking advancement is to restructure the career ladder with more career steps and shorter assignments, leading to more rapid advancement. In many industries, the old model of spending 5-10 years in a role before advancement are disappearing. Smaller, more frequent career steps can allow professional development for employees while also providing a sense of growth within the company. In general, career impact has been found to be a key motivator for millennials, and shorter, focused assignments can be one way to keep them engaged.
• Compensation and benefits do not always have a strong correlation with employee attraction or retention. The CFOs reported that the millennial workforce is often looking for impact and job features beyond pay, like flexible work schedules and the ability to improve their communities. Firms should build retention strategies that facilitate a work-life integration culture, like relaxed dress codes, greater inclusion in decision making, and links to social responsibility.
• Whether through training or hiring, finding the skills needed to utilize new technology is a complex challenge. On the training front, one CFO noted that the steep learning curve associated with new technologies is cost-prohibitive. On the other hand, hiring highly skilled outsiders may also lock in high costs, particularly as quickly changing technologies make some skills less valuable over time. For leaders, addressing the skills issue requires finding and managing the right mix of career employees, recent experienced hires, and contractors. It also requires hiring employees who have learned how to learn and providing them the time and resources to enable frequent, short training cycles. Nashville’s universities and professional organizations can help by offering focused training opportunities.
Working together, business, government, and education can ensure that Music City is both professionally and personally attractive, making 2018 a year that delivers even greater prosperity.
This post was published in the December 22, 2017 issue of the Nashville Business Journal.