We often hear about the war for talent, but are companies looking in the wrong places for the best recruits?
By Paul Lewis
For years, companies have been falling over themselves to attract and retain millennials (i.e. those in their 20s and early 30s) who we are told will skip jobs at the slightest hint of corporate conventionality. Yet the evidence suggests otherwise: a recent Manpower survey in 25 countries, for example, shows that for the vast majority of millennials job security is paramount. Similarly, companies too often pay top dollar for a CEO, despite little measurable proof of performance, fearing that he (it’s seldom she) might leave if not remunerated in the top quartile of his peers.
While companies mistakenly indulge some favoured groups – who probably won’t leave anyway – some firms are starting to acknowledge the existence of other, untapped talent pools that with some flexibility might solve these talent challenges. One obvious example is women who have left work to bring up a family and find themselves permanently shut out of their chosen profession. Many retain useful knowledge from previous jobs, and have picked up additional organisational and academic skills during their time out, to say nothing of a highly developed emotional intelligence. Their abilities far outstretch those of inexperienced graduates or school leavers who they are now expected to compete against.
According to the Financial Times, some companies are now starting to experiment with so-called ‘returnships’ in an effort to access unused talent pool estimated to be worth some £50bn a year in the UK. Returnships were pioneered in 2008 by the late Brenda Barnes, a former chief executive at food company Sara Lee, who believed that middle-aged women returning to work would bring a fresh perspective and reflect more diverse clients and customers. There is a ‘massive pool of highly skilled people who want to return to work,’ says Julie Thornton, head of human resources at Tideway, an engineering company that is targeting gender parity by 2023. KPMG estimates that there are 96 million skilled women aged 30-54 worldwide on career breaks, over half of whom have management experience. Vodafone is launching its ReConnect programme in 26 countries. Telecoms group O2 runs an 11-week ‘Career Returners’ programme which partners returnees with a young recruit to help acquaint them with new technology. Lloyds Bank’s 10-week programme provides returnees with personal coaching, mentoring and bespoke training to help them re-acclimatise to roles and boost confidence. Many participants are then able to return to similar jobs held in their early careers (though often at a lower pay rate).
As well as gender, another overlooked source of talent relates to social class. Another FT article, How social class can affect your pay, suggests the existence in the UK of a ‘class ceiling’ in elite professions. Despite efforts of some firms to recruit from a broader range of social backgrounds, research from the London School of Economics reveals widening pay disparities between social classes as careers progress. It reports that upper-middle class professionals end up earning one fifth more than working class professional peers.
There may be practical reasons for the disparities. Those from elite schools and an upper-middle class upbringing may bring social connections that help win business. But snobbery or a preference for what’s familiar also plays a big part in recruitment decisions – an advantage that, relatively speaking, also benefits women from such privileged backgrounds. Indeed, according to the LSE research the class divide is worse among women.
There may be psychological factors at play. Many executives from working class backgrounds are anxious to fit in, and –especially in the case of women – may feel less entitled to ask for pay rises or promotions. The problem becomes worse when minority ethnic backgrounds are thrown into the mix. As a result, it is the exceptions who prove the rule: socially under-privileged women who do reach senior positions tend to perform better than their peers, but largely because they have had to be better and work harder than their peers.
Employers, especially those who complain about the war for talent, would do well to recognise and then make way for alternative talent pools. Levelling the playing field need not be about concepts of social justice – which many executives may feel unqualified to debate – but rather about spotting untapped value which after all is the very purpose of business.
There is an understandable temptation to use social and educational cues, as much rely on outdated assumptions about gender, as a shortcut during what is often a superficial recruitment process. The problem is that employees come to rely on these signals that may prove to have limited value in practice. Even where ‘social capital’ does provide an initial advantage, this usually diminishes rapidly especially given that most executive jobs do not require heightened social or intellectual qualities. It does not require a huge leap of imagination to see that how taking a broader view on gender, class and ethnicity widens the benefits to business too.
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