“I can’t find people!"
This is without a doubt a common challenge for companies today. Challenges do not go away on their own. As leaders we must develop strategies to use available tools and resources to overcome the challenges. In most key areas of business there are strategic plans. The activities are planned, monitored, and managed to ensure the best results and minimize business impacts.
Do we have a strategy for talent acquisition? Wait, why didn’t I just say hiring? One of the key points of a strategic plan is our mindset. Here are the definitions of hiring and talent acquisition:
- Hiring is employing someone for wages.
- Talent Acquisition is the process of identifying and acquiring skilled workers to meet organizational needs.
Which one is more strategic? Let’s take a minute and compare our thought process for procurement of raw materials and acquiring new employees. Both are important; we cannot make products without materials, and we need people to turn the raw materials into a finished good.
Raw Materials Procurement Process
Talent Acquisition Process
There are significant supply chain challenges now, however most companies have strategic plans to reduce supply chain risks. In talking with companies, this is a focus point for managers and executives, and they can explain the supply chain plan in detail. The key elements for raw material procurement strategic planning include managing the process from supplier sourcing and selection, ordering, receiving, and inventory control.
To reduce supply pipeline risks, more than one supplier is sourced and utilized – not just one pipeline or all our eggs in one basket. When selecting and continuing to use suppliers, the supplier effectiveness and efficiency is evaluated for on time delivery, short shipments, quality, cost, communication, and support. Some companies will consider and evaluate if the raw material should be produced in house to reduce the risk.
Orders are placed to target and maintain safety stock inventory levels considering lead time, delivery frequency, and supplier confidence based on history to ensure no out of stock conditions. We do not wait to order until materials are out of stock and there is no inventory left. There is a process for materials to be checked in, entered into the data base, and moved to the assigned location. The part name is known. The inventory is monitored and managed with cycle counting, min and max levels, and data base entry as the material moves throughout the process. The inventory management is in place to prevent inventory loss. The plan includes a process to monitor and communicate high defects, fallout, or wrong materials used.
Most companies do problem solving and countermeasures to reduce or eliminate repeat issues. High fallout and inventory loss leads to ordering more materials and at an urgent pace with increased material cost and lost profit. The higher the fallout, the more materials needed with a short lead time. This puts the supplier at risk to keep up. Can you imagine not having processes and a strategic plan for raw materials in place?
There are significant labor challenges now, however many companies do not have a true strategic plan to reduce the labor risk. We can start with a talent acquisition mindset versus a hiring mindset – challenge ourselves to develop a strategic plan and move to a proactive versus reactive crisis mode.
Similar to raw material management, we should have multiple talent acquisition pipelines. These pipelines should be evaluated for effectiveness – how many applicants are we getting and efficiency – what percent of applicants are qualified and being hired. If someone asks why we use that pipeline the answer should be based on a strategic plan and data not “well we’ve always used that source.”
Applying the same mindset of producing raw materials in house to reduce risk, can be just as effective when applied to talent management. Can we limit the number of jobs filled by outside hires by developing career paths? This is typically a win-win. The employees are more satisfied and engaged as they see future options for growth and skills development. The employer improves retention with satisfied employees and less risk of on-boarding a new employee in a more challenging position. They can hire for true entry level positions. These career paths do not have to be to management positions. In many cases employees are more interested in areas like technical maintenance skills, logistics, quality, or administrative.
With raw materials, lead times are considered to prevent inventory outages. How about with hiring? Does Human Resources get the lead time they need for proactive talent acquisition? There is a process for materials to be checked in and moved to the assigned location. How is the new employee checked in, aka on-boarded? Is there a detailed plan and schedule to ensure the employee is trained on the what, how, and why? Are they strategically placed in their job? Do we know their names? Do leaders and peers provide positive inputs and information for motivation? Are follow ups done to ensure the employee experience is positive? With a positive strategic on-boarding plan that is consistently followed, retention will improve drastically (aka no high fallout). This will reduce the need for short lead time hiring, overtime, and lost cost. Most companies do problem solving and countermeasures to reduce or eliminate repeat issues for inventory loss. Do we know the root cause for turnover? Are we problem solving and implementing countermeasures for improved Talent Acquisition and Retention?
Let’s challenge ourselves to invest time in our most valuable resource - our people. This starts with acquiring our talent. Ask ourselves the questions above and check our responses – do we know? Is there a plan? IMEC can help – ask me or one of the workforce experts at IMEC how we can discuss this together for your organization. Or better yet, join the Find and Keep Webinar on August 11 where we will dive deeper into the key elements and processes that will improve your company’s workforce stability.