Thought Leadership

The TalentForecastPart 1: Adapting today’s candidatepriorities for tomorrow’sorganizational success.

A global study to uncover what today’s talent acquisition leaders can tell us abouttomorrow’s workplace.

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Organizations need talented employees to drive strategy and achieve their goals, and with the improvingeconomy, finding and recruiting the right people for the job is becoming more difficult.

While the severity of the issue varies among organizations, industries and geographies, it’s clear that the changingglobal economy has created a demand for new jobs, new skills and new capabilities—and organizations arescrambling to find the best workers to fill these positions.

Workers are changing too. Many are opting to work as independent rather than as full-time employees. And whenchoosing an organization, whether on a full-time or contingent basis, more workers are looking at organizationalculture and quality of life in determining where and for whom they want to work.

To explore these issues, Korn Ferry commissioned a global survey on talent acquisition (TA). The survey revealedthat talent acquisition professionals can’t rely on what worked in the past when recruiting top talent today—andthe future will probably bring a new set of candidate expectations. Organizations must understand the prioritiesand requirements of the modern-day candidate and adapt if they are to secure and retain top talent.

To address these trends and to compete effectively for top talent, organizations need to align their recruitingapproach to the realities of the contemporary workplace. They should embrace a blended approach to talentmanagement and recruitment that includes an effective campus recruitment operation; a robust contingentworkforce; a strong social media presence targeted to their workers’ needs; a powerful employee brand; effectivetraining and leadership development programs; and clear succession planning so employees see they can progress.

The stakes are high. Organizations that attract the best talent will be best-positioned to achieve their goals andsucceed in today’s challenging and fast-changing business environment.

Byrne MulrooneyCEO, Korn Ferry RPO, Professional Search & Products

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A tighter market for talent.

With unemployment in most developed nations atthe lowest levels since the Great Recession, and withnew skill sets required to keep pace with technologyadvances, it’s no surprise that we are in an incrediblycompetitive talent acquisition environment.

In fact, in a Korn Ferry global survey of more than1,000 talent acquisition professionals conducted late2016, 54% said it’s harder to find qualified talentcompared to just one year ago. The same study foundthat identifying people with the right skills in a rapidlychanging market is the top business issue impactingrecruiting.

What is the top business issue impacting yourrecruitment?

New skills in a rapidly changing market

Economic conditions/uncertainty

Rapid growth

Millennial expectations

Digital transformation

Globalization

Merger & acquisition activity

Consolidation

Rising retirement rates

Big data usage

“Talent acquisition leaders can’t rely on what workedyesterday when they’re eyeing top talent today, andtomorrow will probably bring a new set of candidateexpectations,” said Jeanne MacDonald, globaloperating executive and president of talent acquisitionsolutions at Korn Ferry. “Organizations mustunderstand these new priorities and requirements ofthe modern-day candidate and adapt if they are tosecure and retain the best talent.”

Key findings.

More than half of TAprofessionals say it’s harder tofind qualified candidates than itwas one year ago.Five years ago, salary andbenefits were the top reason acandidate would choose onecompany over another.Today, culture is the numberone reason candidates choose acompany.Five years from now, TAexecutives predict “workplaceflexibility” will be the top reasoncandidates choose an employer.75% of survey respondentsreported thatthey use a contingentworkforce on either a regularor as-needed basis.Sales jobs are the mostdifficult to recruit, followedby research and developmentpositions and technologyjobs.

Compared to one year ago, it is:

Easier to find qualified candidates

About the same to find qualified candidates

Harder to find qualified candidates

54%35%

11%

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Evolving candidate priorities.

The No. 1 reason candidates choose one job over another today is “company culture,” Korn Ferry surveyrespondents said. That marks a major departure from only five years ago, when talent acquisition professionalssaid “benefits packages” were the top reason.

“Five years ago the world was still reeling from the Great Recession, mass layoffs, and all-around jitters,” saidWilliam Sebra, global operating executive at Korn Ferry RPO & Professional Search. “It only makes sense thatcandidates felt the need for a stable paycheck plus healthcare and retirement benefits. Today, workers are generallymoving beyond basic needs to different priorities.”

What is the main reason you believe candidates are choosing organizations today?

23%

22%

19%

16%

9%

5%

5%

1%Focus on corporate social responsibility

Job stability

Flexible working

Company mission / values that align with candidate's

Company / brand reputation

Benefits package (salary, bonus, medical)

Career progression

Company culture (e.g. focus on employee, inclusive)

Thinking back five years, what was the main reason candidates were choosing organizations?

39%

19%

16%

15%

7%

2%

1%

1%Focus on corporate social responsibility

Flexible working

Company mission / values that align with candidate's

Company culture (e.g. focus on employee, inclusive)

Career progression

Job stability

Company / Brand reputation

Benefits package (salary, bonus, medical)

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Culture is more important than everbefore.

“Millennials are absolutely looking for culture and fit.They want to feel good about where they’re working,beyond cosmetic changes to creating a shared senseof purpose,” said MacDonald. “Gen X, on other hand,are more interested in taking their skill set to a placewhere they can make an impact. Organizations with aculture of acknowledging that impact also have agreater chance of retaining top talent of thatgeneration.”

In addition to assisting in the recruitment of newemployees, a strong and positive culture improvesorganizational alignment and performance. The bestperforming companies almost always have strongcultures. According to a Korn Ferry Advisory study, theearnings per share growth of organizations with “wellaligned cultures” during a five-year period was 13%annually, compared with just 0.8% growth in otherorganizations.

Beyond change, nurturing a strong and consistentculture requires constant support from topmanagement and buy-in from leaders at every level.

From a recruitment perspective, it’s important thattalent acquisition professionals are able to passionatelyarticulate the organizational culture and providetangible examples of how culture manifests itself everyday in the organization.

Culture change requires patience and persistence. Tobegin, an organization needs to:

Understand its current culture.

Define the culture it desires.

Identify culture gaps and challenges.

Determine what actions it must take totransform its culture to align with its strategy.

Culture is intimately tied to an organization’s employerbrand. When employees embrace an organization’spurpose and values, their engagement with customersand other external constituents becomes anexpression of the company’s brand. A brand thatcommunicates its true sense of purpose and how all ofthe organization’s stakeholders, including employees,play a role in that purpose is especially attractive tomost prospective candidates.

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Flexibility and the “gig” economy.

When asked what would be the No. 1 reason a candidate would choose one job over another five years fromnow, the highest percentage of respondents chose “flexible working.

“We’re already experiencing a demand for flexibility, fromworking remotely to flex hours. Workers, especiallyMillennials, demand the ability to balance their work lifewith other responsibilities and interests,” said Kay Cooper,vice president, key accounts, EMEA at Korn Ferry RPO.“Organizational leaders have to understand that offeringthese choices will add to productivity, not take from it.The goal is to focus on getting the job done, notpunching the clock.”

According to MacDonald, flexibility is going well beyondthe hours and location of the worker, to the very nature ofthe employee-employer relationship. “We’re seeing agrowing trend to what many are calling the “GigEconomy” or “Me, Inc.,” noted MacDonald. “Instead oflooking for fulltime employment, talented, high-demandpeople will take contingent assignments, where they canshowcase their unique skills and talents, then completethe project and move to the next gig.”

About 162 million people in Europe and the United States,which represents about 25% of the working agepopulation, are now engaged in some form of independent work (Independent work: Choice, necessity, and the gigeconomy—McKinsey Global Institute, 2016) and those numbers are expected to grow substantially in the yearsahead. Contingent workers offer organizations the ability to adjust the size of their workforce in concert withbusiness demands, enabling them to quickly scale up for projects and ramp back when business activity drops. Forindividuals, contingent work provides greater freedom and flexibility.

Does your organization make use of a contingentworkforce?

No

On an adhoc basis

Yes

41%

34%

25%

And now thinking ahead five years, what will be the main reason candidates choose organizations?

organizations for?

Focus on corporate social responsibility

Job stability

Benefits package (salary, bonus, medical)

Company / brand reputation

Career progression

Company mission / values that align with candidate's

Company culture (e.g. focus on employee, inclusive)

Flexible working 26%

23%

17%

11%

8%

7%

5%

2%

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“As income rises, employees pay more attention totheir lifestyle, work life balance etc. and view rigidwork schedules as ‘old economy,’ noted Chong-MengNg, president Asia Pacific at Korn Ferry RPO &Professional Search. “It’s not about working less, in factsome work more, just a matter of when and how thework is done.”

However, from a talent acquisition professionalprospective, recruiting for contingent workers presentsspecial challenges. Generally, most organizationsexpect a faster turnaround on contingent workerhiring. Organizations that want to avail themselves ofthe contingent workforce should not go about it in apiecemeal way or think of it as a means of savingmoney. Instead, they should think about it as a meansto compete for top talent, said MacDonald.

The hardest-to-fill positions.

As talent acquisition professionals work to adapt tothe changing priorities of the candidate, they mustalso focus on attributes needed to fill the toughestpositions. When asked what are the most difficultroles to fill, survey respondents cited Sales, Researchand Development, and Information Technology.

When recruiting, what role is most difficult to fill?

Sales

Research and Development

Information Technology

Other

Engineering

Operations

Finance and Accounting

Administrative

Call Center

Changing nature of sales.

Information technology has made the sales functionfar more challenging at most organizations. In boththe consumer and business-to-business segments,buyers are far more knowledgeable about vendors,products, pricing, and competitive offers than everbefore. The traditional role of the sales person as aproduct educator is largely gone.

“Everyone has information about products andservices they require at their fingertips,” noted Sebra.“It’s difficult for a salesperson to surprise a customerwith a fact or feature. And because it’s harder, people

are less inclined to go into sales.”

Many organizations are looking for sales people to beconsultative rather than transactional. They want salespeople who combine deep domain expertise andrelationship skills, with the ability to offer completesolutions to customers. Consultative sales people mustbe agile learners, problem solvers, and need to be ableto enlist the resources of their organization on behalfof the customer.

When recruiting for the sales function, it’s critical tounderstand that different roles have different criteria.Outstanding sales people often do not makeoutstanding sales managers, according to Korn FerryAdvisory research. When recruiting for a salesmanager position, organizations should look forindividuals with good sales skills, but who also show astrong propensity toward coaching and mentorship.

While sales managers understand they need to hire toa different skill set than several years ago, many areunwilling to extend an opportunity to candidates whohave great potential, but don’t have exactly the rightexperiences. “The stakes are so high for some salesmanagers. They have shorter cycles and they areacutely aware they can’t afford to make too manymistakes,” Brown noted. “Consequently, they are lessopen to people who have great potential, but mightneed some development.”

Sebra recommends that organizations look beyondexperiences to understand the how the candidatecould fit into the organization for the long-term. “Hardskills, like understanding a product the company sells,can be taught,” said Sebra. “Smart companies look atthe softer skills and drivers that will indicate whetherthat person has what it takes to succeed over time.”

The challenge for organizations in recruiting salespeople is to define precisely the kind of skills, abilities,and experiences that are critical to succeed in theposition and to recruit and hire to those criteria.Moreover, the organization should develop anonboarding and training program that maximizes thechances that newly hired sales professionals willsucceed.

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Research and development roles.

Research and development roles cut across a varietyof industries, from traditional manufacturing to hightechnology. Industry experts state that recruitmentchallenge varies from industry to industry and joblevel.

Traditional industries are often at a disadvantage incompeting with high technology companies for topR&D talent because of salary differences and becausehigh technology brands, in general, are more attractiveto prospective employees. “Engineering talent is moredrawn to high technology and emerging technologiesin the STEM (science, technology, engineering,mathematics) space versus traditional industrialcompanies,” said Geddings Roche, Office ManagingDirector, Korn Ferry Atlanta.

Moreover, many industrial companies are looking forR&D talent with broader leadership skills andcompetencies to work cross functionally with productmanagement or other areas of the organizations. Forthe most part, scientists and engineers do not havethis type of training.

“We can find scientists with great technical skills,”noted Jeff Goodell, market leader, life sciences at KornFerry Professional Search. “But many don’t possess theleadership values and behaviors that will allow them tomove into leadership roles, and that’s what manycompanies want.”

“In general, the R&D talent shortage is most acute formid-level positions. It’s pretty easy to find very seniorlevel people and entry level people. The challenge is atthe director or associate director level,” Goodellcontinued.

Larger companies have an advantage in recruitingR&D talent because they offer greater financialstability, better relationships with major universities,better technology and modern labs, and greaterprospects for long-term career development.

Technology worker shortage.

The shortage of technology talent is a function of theheavy demand for tech workers from the ever-increasing utilization of technology across society. Inaddition to the growth of pure tech companies,virtually every organization now has some sort oftechnology component and many brick and mortaroperations have been transformed into digitalenterprises.

The rapid development and acceptance of newtechnologies has exacerbated the talent shortfall bycreating an almost continual demand for newcompetencies.

“We’re producing new stuff so fast that it’s hard to getexperienced people,” said Sebra. “A client will say Ineed someone who has five years of experience to runa system that has only been around for six years. TheCloud is a great example. Clients are asking for peoplewith 10 years Cloud experience. The Cloud didn’t existin the mainstream 10 years ago.”

Many organizations lack a strong pipeline of workersbecause they have outsourced some tech functionsand entry level positions offshore. As a result, theyoften have to look externally to fill positions. Recruitingtech workers is particularly difficult for organizationsheadquartered outside of major metropolitan areaswhere the local educational system and businesscommunity are not producing enough suitablecandidates. In response to a dearth of local candidates,some companies are setting up satellite tech officeswhere the talent resides, such as in Silicon Valley orSeattle.

When recruiting technology talent, talent acquisitionprofessionals are competing against a wide range oforganizations, from high-tech startups to traditionalindustrial companies. To attract the best talent, it’simportant for organizations to develop and articulate abrand and culture that is specific to its technologyoperation and that will appeal to tech workers

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Sales positions are the most difficult position for which to recruit, along with Research and Development, and Tech positions.

Less Difficult

More Difficult

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A blended approach.

The challenges facing talent acquisition professionals are unlikely to diminish in the years ahead. The pace oftechnological and marketplace change will continue to create demand for new skill sets and brand new jobcategories. Candidates with the right skills will be looking for organizations that provide flexible workingarrangements and a congenial working culture. They may agree to be available via their mobile devices at alltimes of the day and night, but, in return, they will expect to work from home and take time off during the daywhen the need arises.

Demographics also suggest the talent shortage will become more acute in the years ahead. Between 2015-2025,the 167 million workers entering the workforce will barely outpace the 166 million of workers retiring. To meet thesechallenges and to compete effectively for top talent, organizations should first align talent acquisition withbusiness strategy so that the talent acquisition professional has the insight and knowledge to establishrelationships with potential candidates in advance of openings. Secondarily, organizations should develop ablended approach to talent management and recruitment that includes an effective campus recruitment operation;a robust contingent workforce; a strong social media presence targeted to their worker needs; a powerfulemployee brand; and an effective training and leadership development program.

Organizations that create this kind of blended approach and provide flexible work structures in concert withemployee desires will be best positioned to win the talent acquisition game in the years ahead.

To recruit and secure the best people, organizations should take a blended approach that includes...

Training and Leadership

Development

Campus Recruitment

Contingent Workers

A Powerful Employee

Brand

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10 © Korn Ferry 2018. All Rights Reserved.

About Korn Ferry

Korn Ferry is a global organizationalconsulting firm. We help clients synchronizestrategy and talent to drive superiorperformance. We work with organizations todesign their structures, roles, andresponsibilities. We help them hire the rightpeople to bring their strategy to life. And weadvise them on how to reward, develop, andmotivate their people.

Methodology

In late 2016, Korn Ferry ran an online survey to uncoverthe issues and trends influencing the TA leader role.The survey was designed for talent acquisition andhuman resources leaders across all geographies andconducted in the most appropriate language for eachmarket. More than 1100 respondents spanning VP/SVP/EVP, C-suite, director, manager and individualcontributor levels completed the survey. Six majormarkets: technology, industrial, life sciences andpharmaceutical, financial, professional services andconsumer were represented.

Contributors

References

Let Your Strategy Fly: The Impact of Culture onPerformance, Hay Group Insight, 2012

Independent work: Choice, necessity, and the gigeconomy, McKinsey Global Institute, 2016

Global Growth: Can Productivity Save the Day in anAging World, McKinsey Global Institute, 2015

Jeff GoodellMarket Leader, LifeSciences, ProfessionalSearch

Geddings RocheOffice Managing Director,Atlanta

Kay CooperVice President, KeyAccounts, EMEA, RPO

Chong NgPresident, Asia Pacific,RPO & Professional Search

Bill SebraGlobal OperatingExecutive, RPO &Professional Search

Jeanne MacDonaldGlobal Operating Executiveand President, TalentAcquisition Solutions

Byrne MulrooneyCEO, Korn Ferry RPO,Professional Search &Products