Find, Hire, Keep – Part 1: Who Are You Competing With (And How Do You Compete?)
When most people think about talent, they think about acquisition – how do you find and hire the right people? Bringing the right people on board is important, but it’s not the only factor to consider when building and nurturing a team.
This is the first installment in a three-part series in which talent management experts Kelie Morgan (Permanent Equity) and Ashley Day (FFL Partners) share experience and insights on how smaller companies can improve their hiring process, employee retention, and what challenges and opportunities lie ahead for operators trying to build great teams.
Kelie is the Director of Talent Acquisition at Permanent Equity, where she leads talent acquisition, building relationships, researching compensation structures and roles, and evaluating candidates for roles at portfolio companies and the firm. She also heads The Orbit, Permanent Equity’s talent acquisition network.
Ashley is an Operating Partner at FFL Partners in San Francisco. She works closely with FFL’s portfolio companies, advising them on all aspects of talent management, recruiting, compensation, succession planning, retention, team building, and performance management.
Who are you competing with (and how do you compete)?
For all the recent talk of recession, the reality is that, outside of large tech company layoffs, the environment for talent isn’t there yet. It’s still a hot talent market, and recruiting, hiring, and retaining the right people can be challenging. One question to ask is, “What are my competitors doing to attract talent?” For pure competitors (those providing the same services or products in your market), you can look at their job postings, how they’re framing the opportunities, the titles they’re giving people, and associated compensation packages.
But understanding what you’re up against in hiring and retaining talent may not be as straightforward as identifying companies in the same sector and market and analyzing pay and title.
Ashley: We've seen folks who are willing to change careers and to shift industries, and I think that's really meaningful [to small and midsize businesses]. As you think about your hourly employees, your competitors are not necessarily who you think they are when it comes to talent.
Because people are changing jobs in industries, [you have to understand] who are the key people who are hiring? So even just looking more broadly in your local market to see who is posting jobs in the same pay scale as you and what are they doing to attract talent? Because they might be taking employees from you.
To figure out who you’re really competing with for talent – and to better position yourself to hire the best people, it pays to go back to basics. First, ask yourself, “Why do people leave?”
Ashley: I might be a healthcare company but … a third of my hourly employee base left to go to work at Amazon. And so maybe that's about pay, but maybe there are other factors there as well that you could be looking at.
Kelie: Your competitors aren't just the people in your same exact industry and space. Your competitors might be the Chipotle down the street because they're hiring people at $18 an hour and you're hiring entry-level at $15 an hour.
Ashley: When it comes to compensation… you can only pay what you can pay. There's only so far you can really ever move on that. We’ve seen a lot of success in our portfolio [getting creative]... and looking at how we can make the benefits package more attractive to our employee base and make it more affordable for our hourly employees so that more people are actually using the benefits.
The other area where we've seen some success is getting flexible on how employees are paid. Paying employees weekly or even daily has become a successful strategy for us where that can make a huge difference to folks who are getting an hourly wage. They might need that money sooner, and it can be a real game changer for them compared to another company who can only pay once every two weeks.
Kelie: One of the exercises I walk through with our portfolio company leaders is pipelining talent. “Let's look at your competitors. Let's look at your city. Let’s look at the market you're hiring in (and sometimes beyond that). Let's start looking for people who would be great additions to your team. And then let's start building relationships with those people.”
And, it’s not difficult to start pipelining talent:
Start with a Google search. Look for relevant people on LinkedIn.
Develop an outreach plan. Who should reach out?
Start building relationships. The goal is that, when they start thinking about their next opportunity, you’re top of mind for them.
Kelie: It definitely can pay off during a recessionary environment because there could be turmoil and layoffs at these companies. If you have those relationships developed, even if they’re lukewarm, you're already on their radar.
Ashley: In our portfolio, we've had some real success, even for entry-level jobs, doing some of that outbound searching for folks. You're taking that high touch recruiting to an employee base that hasn't necessarily experienced outreach before. They haven't had someone reach out to them and say, “Hey, have you thought about our company? We like your skill set and think that you could be a really good fit.”
That can be really impactful for people. Of course it depends on the scale you're hiring. It doesn’t work at a high scale of hiring or a high pace of hiring. But it doesn't have to be just for senior hires.
The bottom line? Getting a nuanced understanding of who you’re competing with for talent – both in your sector and beyond – can inform how you structure more aligned compensation packages, support employee retention, and guide long-term talent planning and recruiting.