We often hear about the rarity of top talent, and the difficulties of recruiting, rewarding and retaining the best. But are companies looking in the wrong places? While the debate rages over justifications (or lack thereof) for high executive pay and the difficulties of retaining footloose and starry-eyed millennials, companies may be missing other talent pools through lack of imagination, inflexibility and prejudice.
For years, companies have been falling over themselves to attract millennials (i.e. those in their 20s and early 30s) who we are told will skip jobs at the slightest hint of corporate conventionality. Although some younger staff do look for experiences and personal development, the FT reports that millennial job-hopping may be a myth. A Resolution Foundation study reveals that over half of today’s millennials remain in the same job for more than five years (compared with 43% of young employees born a decade earlier), resulting in lower pay rises of some four percentage points. The financial crisis appears to have accelerated a trend that began before 2008, with a Manpower survey in 25 countries showing that for the vast majority of millennials job security is paramount.
The fruits of labour
While companies mistakenly indulge the above groups who probably won’t leave anyway, some firms are starting to acknowledge other, untapped talent pools. This includes women who 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. The FT reports that some companies are finally experimenting 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).
A touch of class
Another waste of talent relates to social class. An 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. The class divide is worse still among women. 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. On the other side, there may be psychological factors at play. According to the LSE research, many executives from working class backgrounds are anxious to fit in, and may feel less entitled to ask for pay rises or promotions. As a result, it is the exceptions who prove the rule: socially under-privileged employees tend to perform better than their peers, but only because they have to be better and work harder.
For employers, leveling the playing field is not about social justice but spotting untapped value. There is an understandable temptation to use social and educational cues as a shortcut during what is often a superficial recruitment process. The problem is that employees come to rely on these social 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.