How High-Performance Organizations Find Talent from Alternative Sources (i4cp login required)

Productivity

Walmart CEO Doug McMillon explained the overstaffing during the company’s quarterly earnings call this month, which he attributed mostly to the pandemic. Walmart hired extra associates in Q4 of 2021 because staff members were out on COVID leave, but many employees returned to work sooner than expected. The several weeks of overstaffing, which has since self-corrected via attrition, impacted profits for the most recent quarter—a profit decline of nearly 25% from the year before, according to Business Insider.

And yet help wanted signs still appear at countless stores and restaurants, airlines and airports are clearly understaffed, and we continue to see shortages of truck drivers, dock workers, and others involved in the global supply chain.

The Institute for Corporate Productivity’s (i4cp) Accelerating Total Workforce Readiness study found that high-performance organizations consistently leverage talent from alternative sources beyond traditional full-time and part-time employees.

This tracks with i4cp’s earlier research and well-known Talent Ecosystem Integration Model™, which illustrates the broad range of talent sources high-performance organizations tap into—from college/university students via co-ops and internships, freelance and gig workers, and apprenticeships, to overlooked talent pools such as the formerly incarcerated, people with disabilities, and more.

That said, our data found that the overall usage of expanding and multiple talent sources is still relatively low, indicating that there is a lot of overlooked potential for organizations that are continuing to struggle to find the talent they need.

Key Practices for Engaging with Talent From Multiple Sources

i4cp’s most recent major study, The Talent Imperative, unearthed several key practices that high-performance organizations use more often than their lower-performing counterparts to better identify and engage with talent from alternative sources. In fact, low-performance organizations were 2X more likely to say they aren’t looking outside traditional sources for talent. And our research found that 20% of large organizations (those employing >1,000 people) are missing out on opportunities to address talent attraction and retention.

Non traditional sources and backgrounds talent chart

To expand reach into viable talent pools, organizations must begin by challenging old assumptions, self-imposed constraints, and even biases about alternative talent sources. Organizations should review their job descriptions and talent systems from attraction to exit and identify and remove barriers that exclude people from being hired or developed. Questions to ask should start with: Does this job really require a four-year or master’s degree? For example, as highlighted in The Talent Imperative, IBM was able to dramatically reduce the number of jobs that require a college degree and in doing so, expand its talent pool.

Institutional barriers such as policies, procedures, and cultural norms should also be reviewed and addressed if they are identified as making it difficult to engage with and hire talent from underutilized and non-traditional sources. For example, some individuals can’t wait two weeks or a month for a paycheck and may benefit from payroll systems that provide payment more frequently. Are byzantine orientation or training processes and benefit enrollment procedures needlessly complex? Do dress codes prevent new hires from feeling comfortable or that they belong?   

Another foundational talent practice of high-performance organizations is forging partnerships with groups or organizations to develop non-traditional talent pipelines. For example, Tesla partners with Jobs for American Graduates in Nevada to recruit disadvantaged high school graduates for apprenticeships in its manufacturing development program.

Development of managers is key

Education for managers and leaders is obviously fundamental—leaders must understand the many benefits of employing talent from underutilized sources. Several i4cp reports and case studies have detailed these benefits, such as Microsoft Software and Systems Academy and The Inclusive Talent Pool: Employing People with Disabilities and How Amazon Partners with the Military.

Managers also need training on how to most effectively look for and manage talent from under-employed groups, such as the formerly incarcerated or the differently abled. With minimal accommodations and management process changes, a much larger talent pool can open up to fill current and future needs.

Hiring managers and talent acquisition professionals must also develop true partnerships—this may require joint training on where and how to look for new pipelines of talent and the best ways to connect with and form partnerships with organizations.

And finally, as we all know—rewards work; our research found that high-performance organizations are more likely (22%) than lower-performing organizations (7%) to incentivize leaders to hire and develop talent from across a broad talent ecosystem.

It has become clear by now that traditional talent pipelines are insufficient to meet current and future demand, which begs the question: why depend on so few sources when there is a diverse talent ecosystem out there? High-performance organizations are more often looking at different and nontraditional sources of talent, and using key enabling, educating, and incentivizing practices when doing so.

Tom Stone is a Senior Research Analyst at i4cp

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