The War for Talent

The War for Talent - What do Young Professionals Want?

Recently I had the opportunity to speak with eight high-growth firms as part of discussions over a quality professional practice we are assisting in selling. These meetings again highlighted a major issue facing the profession – the attraction and retention of talented professionals.

Attraction and retention of young professionals is a challenging issue for many professions and was the topic of a report titled ‘Employee Loyalty Research’ completed recently. The report summarised the findings of a study into factors impacting loyalty amongst professionals under 35 years of age.

It appears that young professionals are looking for 3 key aspects from their employers.
1. Constant learning
2. Challenging work
3. Contribution to the organisation

Attracting professional team members
The survey provided solid clues to assist professions to attract young professional team members. Young candidates look most specifically for:
1. Career development and ongoing learning opportunities that are actively managed by the employer
2. A good reputation within the industry and with previous employees
3. A speedy recruitment process that includes exposure to staff and/or partners
4. Sound remuneration. You need to offer your team members compensation that reflects the value they deliver while at the same time gives them work, responsibility and accountability that stretches their ability and allows them to contribute to the organisation.
5. Work life balance. Firms in which people are expected to work a 45-60 hour week doing basic work are not attractive to young professionals. Even if team members do not work these hours, when they see the owners doing it they are turned off the prospect of ownership and will not remain in the company for an extended period.

Retaining Young Professionals
Retaining valuable team members is vital for business success. Surprisingly, nearly 45% of survey respondents indicated they plan to stay with their current employer for less than 3 years. The principal reason they list for leaving is lack of an obvious career path followed by remuneration then lack of challenging work.

People under 30 years of age are more interested in skills acquisition than they are in remuneration but as they get older they’re looking to be rewarded for their skills now acquired and are seeking promotion and more responsibility.

What’s also interesting is that amongst the sub 35 year old group 60% plan to leave within 5years and only 10% expect to be with their current firm 10 years from now.

In the survey, parents of before-school age children tend to want long tenure in their current role and appear to be more settled than those without children.

A number of younger professionals indicated a low tolerance for routine or mastered tasks and highlighted that this would be a factor in their decisions to leave an organisation. They want to quickly turn their experience into promotions or other challenges. Younger professionals are more likely to stay longer in small and medium sized firms if they are given autonomy, flexibility and greater client contact.
They also believe high remuneration, senior roles and work-life balance go hand in hand. 21%of respondents reported that greater work-life balance would improve their work satisfaction and affect their retention rates. Work-life balance and policies that support this are seen as standard features of employment and not optional extras.

One surprising finding was that young professionals expect their employer to take responsibility for establishing their career path, particularly within the first 12 months of hire, with 33% stating they would leave a position if they could not see a clear career path. Career path does not necessarily mean you need to promote the person – it could just be giving a new skill or larger client base. Whatever you do, you need to clearly spell out your intentions or you could risk losing valuable employees.

Implications for Professional Practices
How you manage your team and develop their potential is vitally important where 40%+ of your expenses are direct labour costs. Your ability to effectively attract, retain and manage your team is intrinsically linked to your business strategy.

To attract talented people and to retain them you must create a firm that does interesting and challenging work. This means designing and delivering services that are valuable to clients and which call for challenging and interesting engagements that stretch an individual's abilities requires the sharing of their skills. This in turn means you must attract clients who are willing and able to see the value you create for them and are willing and able to pay for that value.

If your business strategy is to focus on doing high volume, low level work that is routine and repetitive in nature and can only support modest prices, then you will have an extraordinarily hard time attracting and retaining talent.

Your younger team members will not stay with you for very long and you will experience lower margins partly because of productivity challenges arising from high team turnover and partly because you will have limited opportunity to premium price non-premium services.

Firms that achieve a sustainable competitive advantage as reflected by higher margins and a higher level of profit per owner/director are those that truly understand the importance of having a strategy built on offering the right services to the right clients at the right price.

As a result, these firms give their team member’s lots of client contact and assignment variety and are able to pay above average compensation. Because they are actively involved with helping their clients grow their business they are creating a “reliance relationship”. Interestingly, this foundation not only yields higher profit margins today but it also creates greater client loyalty, a much richer referral source and a very loyal & committed team. Note also with this strategy, to secure your risk, consider employment contracts to include restraint issues.

Your starting point for creating a great firm must always be the vision you have for it which in turn will define your strategy. Then it’s simply a matter of execution.

Having the vision and defining the strategy is the easy part – although it’s amazing how many firms have neither. Execution and being patient is the hard part but, as is the case with all things in life, the rewards for those who pursue the hard yards are significant and most definitely worth the effort.