Talent grab

Tony Wanless | | Published: May 01, 2006

The office of Sierra Systems International on West Hastings Street in downtown Vancouver is not what you’d call a hive of activity. Except for a few staff, there’s barely anyone on the three floors of the B.C.-based international IT and business consulting firm’s headquarters. Certainly, there’s a magnificent view of nearby Stanley Park, lots of evidence of group events and sports activities, and a general feeling that this is a centre of almost mythological healthy West Coast living. There just aren’t that many people.

But that’s okay. Sierra Systems, a $150-million-a-year enterprise with almost 1,000 employees in 15 Canadian and U.S. cities, doesn’t really want its staff hanging around the office. In fact, it encourages the opposite. The essence of its consulting is collaboration with customers and it’s pretty hard to collaborate remotely, so most of Sierra’s consultants work at client sites. Highly skilled and trained in consulting, business and, of course, information technology, they’re considered intelligent enough to manage their own lives. Sierra doesn’t even have a management structure in the traditional sense. Line managers are “mentors” who guide employees in the pursuit of their own learning, their own careers and their own experience. The formal structure of a traditional office, with senior people occupying window offices and junior people confined to cube farms in the middle, doesn’t exist here. At Sierra, the juniors get the window offices.

Sierra CFO Warren Beach explains it’s a corporate culture that forms part of the Sierra campaign to attract top talent, the new professional worker of the 21st century – highly skilled, talented, independent, demanding – and in extremely short supply. The Sierra website dangles many lures for this new professional: it’s filled with postings of high-paying jobs for business analysts and consultants, offering “challenging assignments, a career growth program, no bureaucracy, best-of-breed practices, life after work and competitive compensation.”

As B.C. enjoys the latest of its cyclical economic booms, much attention is being given to the so-called labour shortage and what to do about it. Economic gurus complain that construction and transportation workers can’t be found – the housing boom and 2010 Olympics projects have drained the well dry of labour and tradespeople.

But a far more serious and subtle war for workers is occurring in B.C. – yet no one seems to be sounding the alarm. Whatever the reason, the fact remains that indeed, there’s a severe shortage of labour in this province; but there’s an even more serious shortage of talent.

In a knowledge economy, to which B.C. is increasingly being converted, talent is often thought of as “human capital” and is considered as important as financial capital was in the industrial economy. This human capital – the educated professional purveyor of some (usually business) skill – is much sought after by companies operating in business services, technology and the creative industries that make up a growing part of the B.C. economic

picture. It should be surprising that the human capital pool is shallow here: after all Vancouver was recently named by Fast Company as one of the top cities in the world for the “creative class,” that highly skilled, creative and innovation-driven cohort of new-economy workers involved in everything from technology to law, to entertainment such as film and video games. But the survey merely categorized cities by the amenities – such as social tolerance, diversity and high-class eateries – that draw people of the creative class. It didn’t measure the actual availability of those people. And just about any professional services or technology company in B.C. will tell you that right now it’s sheer hell trying to find – never mind keep – the right kind of skilled worker. And it’s going to get a lot worse before it gets better.

Some companies requiring extremely specialized skills are scouring the earth for talent. Others that require more general skills, such as management ability, are battling it out with competitors for the few A-list stars out there and desperately ladling on workplace pleasures in order to keep them. Reasons for the shallow talent pool abound, but essentially they boil down to three main causes. Masses of skilled workers – the baby boomers – are retiring and there aren’t enough generation Xers behind them to keep the machinery working. Many businesses are growing rapidly and so not only need to replace disappearing professionals, but need to add to their numbers. Skilled employees today have differing viewpoints – and requirements – of a job than their counterparts of 20 years ago, and can demand they be satisfied because we’re now in an employee’s market.

“It’s a global problem. For the first time since the industrial revolution, companies need workers more than workers need them, so people now have options,” explains labour market and economic consultant Roslyn Kunin, of Roslyn Kunin & Associates. “Economies are in transition and they need high knowledge at all levels. The old job-for-life concept is gone, and security these days is having cutting-edge skills. Employees today know that, but employers who don’t are going to have a hard time.”

Hard times are already here, apparently. A recent survey by the accounting and management consulting firm Grant Thornton LLP of 100 law, accounting, architecture, engineering and marketing firms across Canada showed that 42 per cent of respondents believed that difficulties finding and retaining skilled employees were “constraining” their ability to grow. It concluded that “availability of skilled workers will be a significant issue in future” because most firms are expected to grow. Sally Scotland, Grant Thornton’s Toronto-based national HR manager, suggests that, beyond demographic and economic causes, one reason for the dearth of suitable talent might be the different nature of today’s employees. A generation ago, when industrial-style business ruled, highly skilled employees competed with each other not only for the best gigs, but also within their own operations. In today’s project-based or collaborative economy, professionals want to be part of a team and to be recognized for the value they are bringing to a company. If there’s even a whiff of old industrial-style command-and-control thinking in the air, they’ll avoid the operation like the plague. There’s always another suitor on the next corner.

“The baby boomers tended to be workaholics and were more structured,” Scotland says, “but the world has changed and many jobs have become more complex. The borders have broken and the workplace is now less stable and more fluid. Younger people with skills are more comfortable with this, and form world views that fit it. But often managers, who are baby boomers, haven’t kept up with them. They still think in structural terms, while younger people think more about values.”

World views are important factors, but an even bigger factor is simple demographics. It’s not exactly shocking news that the baby boomers are starting to retire or semi-retire en masse, and there’s going to be an empty talent pool in their wake. Retirement planners, human resources consultants and social scientists have been saying for years that people are retiring earlier and have also been changing their attitudes to work – demanding more work-life balance, for example. These same boffins have also been warning for some time that the nature of modern work is getting more complex and that a new set of skills is required to deal with it. So why didn’t anybody do anything about it?

Because, says Graham Dodd, the Vancouver-based national practice director of human capital with the Watson Wyatt group of employment consultants, many companies in Canada have had their heads in the sand in the hopes the problem would go away, or that they could somehow muddle through it. Recruitment of talent, which used to be a routine human-resources chore, is now becoming a strategic management function that will eventually force its way into the general business consciousness. “A lot of people assume that something miraculous is going to happen,” Dodd says. “Maybe we’ll triple immigration and that will take care of it. But it’s not going to happen. This is the Y2K issue of human capital but unlike Y2K, the talent shortage happens in different areas at different times and creeps up on you.” In B.C., Dodd says, it’s hitting faster than anybody realized, as evidenced by recent corporate acquisitions that pursued talent instead of assets. When economies get hot, as is the case in B.C., talent shortages follow. This point will soon be forcefully brought home to the business community when service-business CEOs realize their elaborate 25-per-cent growth plans are foundering because there’s no one available to execute them.

The technology and new-media industries, which are booming again after a few difficult years, have measured this new human capital zeitgeist and are taking steps to combat it. The BC Technology Industries Association held a symposium on human capital last year and determined that a talent shortage should be extremely high on the agenda. The association is now engaged in planning a comprehensive study of the problem. “The symposium yielded many challenges, primarily finding people with the right technical skills, with experience in specialized sales and marketing, and especially at the executive level,” said Rob Cruickshank, BCTIA president. The industry, he says, is battling a turn among the young away from technology because of the previous downturn. “We’ve noticed that information technology programs at BCIT, which were once overflowing with applicants, have shrunk because the candidates are going to finance now,” he notes.

Furthermore, improved pay packages and the famed B.C. lifestyle are no longer enough to attract top talent from outside the province. Now, because the main draw is opportunity or the chance to move around to different jobs and businesses, highly skilled people are looking at the future more than ever. They know that the world is much more unpredictable than it used to be, that their job may only last a couple of years and that they’ll then have to move to another one. Career planners are far more strategic now, and instead of simply accepting that they’ll have to move to another city in future, they carefully study the landscape ahead of time and plan for their next job, and perhaps even the one after that.

“We have to look out two or three years, identify our strengths and weaknesses, and determine how to grow our industry,” Cruickshank explains. “One of the problems we’ve identified is that top talent is attracted not so much to compensation or lifestyle but to what other opportunities exist. To provide them, you need a bigger industry. If you can’t show people the opportunities that will be there for them over the next few years, they’re just not going to come.”

Video games maker Radical Entertainment, which was bought last year by entertainment industry giant Vivendi Universal, has figured this out. Known as one of the most active recruiters around in an industry where the stakes are constantly climbing (a video game can now cost up to US$20 million to produce), Radical added 100 people to its Vancouver operation last year, and expects to add another 100 this year for a total of 250. Almost every one of those people has to be highly skilled, seasoned and eager to climb the ladder. When recruiting it helps, says Leah Rubin, VP of HR, that Vancouver has become known as the Hollywood of the games industry and that Radical now has a very large corporate parent. These factors make Vancouver very attractive to games pros around the world – particularly in England, which has plenty of talent but a slumping industry, so many people are looking to move.

To keep those people once they are here, Radical has appointed a “retention manager,” who designs strategies to please all those new hires when they move here. These can include career-path charting, objective and goal setting, intense management training (many seasoned games designers are technically proficient but come from very free-form – usually smaller – companies that do not train managers) and yearly 360-degree performance reviews (by superiors, peers and people working under them). “Our recruiting guru is retention,” explains Rubin. “The dearer the talent, the more important are the retention strategies. Our biggest human resources budget item is relocation, usually of more seasoned, older people.”

The legal profession is facing similar problems, says Stephen Nash, founder of The Counsel Network, a recruiting firm for legal talent that began in Vancouver and has since expanded to Calgary and Toronto. According to Nash, talent shortages follow economic cycles: there was a shortage in the late 1990s, which was alleviated after the crash of 2001 and has been growing again since last year. “We’re about a quarter way into the cycle again,” he says. “International firms have begun trolling Canada for talent, which is creating an effect all over the country. Coming up is the demographic factor, the retirement of the baby boomers. That kind of leadership is very difficult to replace.”

Clearly, it’s a scramble out there to attract top talent. But it’s just as important to keep that talent once you’ve attracted it. In fact, says Sheila Carney, of specialty recruiter Vantage Resourcing and a veteran recruiter of talent in the technology and finance sectors, the two tasks are integrating, with retention becoming more important to some companies than recruiting. While some concentrate on finding people, others – like Radical and Sierra Systems, which also has very little employee turnover – more strategically emphasize employee retention. “If you want to keep top people,” says Carney, “you have to satisfy the needs that brought them to you in the first place – the opportunity to work in teams and to deal with clients, to be challenged and to learn. If that’s missing and they find they’re just being put in some slot, they’ll bolt. And if you think simply giving them more money will do it, you’re wrong. Money isn’t a motivator anymore, although lack of it is a big de-motivator.”

Also, in some cases recruiting has just become another exercise in branding and marketing. In some companies, especially at lower levels, there seems to be a disconnect between recruitment messages and the reality of everyday life for new recruits. “Some companies want the best, but then don’t walk the talk,” Carney says. The trick to retention, she adds, is to fulfill your promises and keep fulfilling them. Executives must thoroughly understand their own companies, their needs and desires and what stage they’re in so they can align the right talent for the right time in a company’s life. This involves an old bugaboo for many businesses: long-term thinking and strategic recruitment, which companies in growth mode sometimes forget in the midst of the daily firefighting.

“One of the greatest strengths we can have in this climate is to know ourselves,” Carney says. “If you don’t know your own strengths and weaknesses, you’ll lose in this market – because you can bet the talent does.”