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How the Talent Crunch Is Affecting the Middle Market

May 25, 2017 11:00:00 AM |

Joseph Cieglo

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Talent Gap-235669-edited.jpgMid-size companies today face significant challenges when it comes to finding, retaining and training qualified employees. The talent gap isn’t unique to mid-size companies, but it can have a more significant impact on businesses at this stage of growth because they must compete with larger companies to attract and keep talented employees. The talent gap can affect businesses in a number of ways, from decreased quality and customer service to lower job satisfaction among executives who find themselves buried in mundane tasks out of necessity.

One large contributor to the talent gap is an aging workforce. Many companies have grown from start-up to mid-size by relying on the same workers for years. They may have treated employees well enough that they remained loyal and stayed, but they have not put much emphasis on attracting new talent or training the talent in-house to grow their current positions. As Baby Boomers have started to retire, many executives find themselves searching for qualified management talent in what has become a seller’s market. Internal staff hasn’t been trained to grow into management roles, and outside hires are unknown quantities who may have salary and benefit expectations that don’t align with what your business provides. What follows are some suggestions for either training talent within your organization or recruiting talent from outside of your company. 

Training those within your organization – Almost every business has talented employees who may be ready to step up to a new level in their careers.  The issue is identifying these employees and setting up a proper way to train them to advance. This works well from the employer’s standpoint, because you fill more vital roles with internal candidates that have a proven record of achievement, and you only have to reach outside your organization to fill entry-level positions.

This method requires an understanding of what your employees want out of their careers and advance planning ahead to help them achieve their goals. One way to create a system for internal advancement is to set goals within annual performance reviews that encourage employees to learn new things and get out of their comfort zones. Those goals could include attending meetings they wouldn’t normally be a part of so that they begin to understand the big picture, helping with certain proposals or initiatives or assisting in preparing budgets or forecasts. Participation in activities that would normally be tasks assigned to someone a level or two above where they currently sit helps them to understand the business and what it takes to advance within your company.

In order for an internal growth program like this to succeed, the employee’s manager will certainly need to understand and support participation in these advanced tasks. It can also be extremely helpful to set up a formal mentor program within your organization to help foster an environment of support and learning. Changing your culture to more effectively grow talent from within requires a time investment by those in higher level positions. They will be the ones training and mentoring these younger employees. Depending on your management team, this can be a significant friction point for the new program.  It’s critical that your managers realize the importance of training these employees and that it will help the business survive, grow and avoid talent gaps in the future.

Attracting talent to your organization – If you currently find yourself in a talent crunch due to expansion of your business or employee turnover, growing from within may not be the immediate fix your situation requires. In order to fill these gaps you will have to locate qualified candidates outside of your business. Finding qualified talent and getting them to commit to your mid-size company could be one of the toughest challenges you will encounter. The current market favors the job seeker and many mid-size companies are struggling to appeal to qualified millennials who can fill an open position.

In order to make sure your business is ready to attract top talent, you may need to examine how your compensation and benefit policies measure up to your competitors. For many mid-sized companies that can’t afford to pay salaries that match their competitors, flexibility in the workplace can be a key differentiator. Is your workplace one where employees must be present on-site by 8 a.m. and can’t leave before 5 p.m., regardless of workload? Are your performance measures based on hours worked, or results delivered? Many of today’s candidates, especially millennials, put a premium on flexibility. If you can show that they will enjoy working for your business more than your competitor, you may be able to compete more effectively even if you can’t pay as much. Flexibility in the work place can be a tricky thing to balance with the ongoing needs of your business.  HORNE offers several other blogs within our collection that specifically address this issue. I will say however, if you are a company that can’t afford to pay large salaries, these areas can help to set your company a part from others in your industry.

The second key to hiring from outside of your organization is setting the new employee up to succeed. This requires a combination of making them feel welcome and helping them get acquainted with your business and systems. Proper training is critical, whether that is job shadowing, a mentor program, training videos or some type of concentrated orientation with scheduled follow-ups. The method can vary depending on the company and the role. It can also dovetail nicely with the programs you put in place to identify and groom talent in-house.

We’ve helped businesses set-up training and retention task forces to help ensure that employees get the proper education and mentoring needed both for new hires and valued employees. If you’re facing a talent gap caused by baby boomer retirements, you could also propose some type of part-time arrangement that engages them as mentors and counselors. Many retirees find themselves with more time on their hands than they expected. These folks might find a part-time consulting position appealing, whether it is a few times a week or a few times a month.

One thing is for sure—the success of your business will always depend on its ability to evolve and adapt to an ever changing workforce and business environment. HORNE can help you meet today’s challenges and plan for tomorrow’s. Please contact your engagement team if you would like to learn more about how we can support your efforts.

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THIS POST WAS WRITTEN BY Joseph Cieglo

Joseph is a supervisor at HORNE LLP focused on providing assurance services to large private and publicly held companies in a variety of industries including manufacturing and distribution, agribusiness and electrical cooperatives.

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