As the US and global economies continue to recover, employers are being forced to compete for talent in a tighter market where candidates set the pace. Organizations need to bring on and retain more employees to keep pace with growth, and the uptick in hiring means candidates can afford to be more selective. A recent CareerBuilder study indicates that a full three quarters of American employers are looking for new jobs either actively or passively. Our research here at CEB also points to a candidate-driven market. For instance, data from one of our upcoming studies shows that 17 percent of passive candidates are declining to pursue job opportunities when initially contacted, compared to just 8 percent five years ago.
This trend has important implications for how employers attract and retain talent. Many organizations are doubling down on employee experience, making their employee value propositions (EVPs) more distinctive and innovative. Since you can’t control your competitors’ hiring strategies or rewards, crafting a unique EVP is a more productive way to differentiate your organization from its competitors than simply trying to match what others offer.
Creating an exciting EVP is particularly—though by no means exclusively—important in attracting and retaining STEM (science, technology, engineering, and math) talent, a segment of the market that’s in high demand. Our research shows that STEM roles take more time and cost more money to fill than non-STEM roles. Many job openings in STEM-heavy professions like IT and health care are going unfilled, ostensibly due to talent shortages.
Yet whereas most organizations—in a usually unsuccessful attempt to compete with the likes of Google and Facebook—think higher pay is the only way to attract and retain coders and other STEM talent, a recent article in the Harvard Business Review offers an alternative. HBR‘s Walter Frick points to a recent working paper in which Prasanna Tambe, Xuan Ye, and Peter Cappelli argue that organizations should look beyond pay and consider enticing this cohort with a chance to learn and grow instead.
The researchers used data from Glassdoor to understand the global salary expectations for IT workers when pursuing a new job and compared that to a smaller segment of IT employees whose firms were understood to be more innovative (based on whether or not they used Hadoop, a cutting-edge program for managing large datasets). Their findings suggest that these employees are harder to peel away from firms that give them the opportunity to use the latest technologies and build their skills:
IT employees at firms using Hadoop listed target salaries on Glassdoor.com almost 2% higher than those at less technically innovative firms. In other words, they required a 2% higher offer from another employer to consider leaving their current job. This result held after accounting for region, industry, occupation, current salary, and even the current employer’s IT investment and R&D budget, among other factors. …
Workers aren’t just attracted to companies with new technology; they [also] value the opportunity to build their skills. To test this, the researchers looked at company reviews on Glassdoor, and identified reviews where the “pros” included terms related to the opportunity for learning and training. Then they combined this learning opportunity measure with the IT innovator measure and found that “IT workers derive value from early IT adoption only at workplaces where they can learn new skills.”
This approach is interesting, and offers lessons for HR regarding STEM employees, non-STEM employees, and the EVPs organizations use to support both. Here are some other things to consider as you refine your EVP for a more competitive talent market:
- With its value, STEM talent brings challenges. STEM talent is incredibly valuable. These individuals fill a specialized — and increasingly important — role in today’s economy. However, their working styles can pose challenges, too. STEM roles are more cross-functional than non-STEM roles, so they require more collaboration. But, while STEM talent recognizes the importance of collaboration, they’re less likely to exhibit collaborative behaviors. Proactive network management coaching and support are therefore essential for helping these employees reach their full potential.
- Development is important for STEM—and the rest of the global labor market. Our research confirms that career development opportunities are an important attraction driver for STEM talent globally. However, a lack of such opportunities was the most-cited driver of attrition among employees globally last year. Development and career opportunities should therefore be a priority for the whole workforce, not just STEM talent. While crafting a truly unique EVP involves customizing it across different talent segments, be selective in what you offer some employees and not others. This element, in particular, is usually one to focus on across the board.
- Insight into employees’ preferences can come from unusual places. The strength of a compelling EVP is anchored in and informed by employees’ day-to-day experiences. By understanding what employees feel is important, missing, and under-delivered when they come to work every day, organizations can get a clearer picture of precisely where to take action. While employee engagement and exit surveys can clarify these points, there are other valuable data sources, too. The authors of that paper smartly used external websites such as Glassdoor to understand the preferences of employees and job seekers, and our data (CEB members only) points to an increasing trend of using alternative data sources to help inform improvements to EVP and engagement strategies.