Question: What are some of the biggest mistakes you see people make on their talent strategy?
Answer: I think most companies don’t have a clearly defined talent strategy so it can be hard to know who we are trying to attract and retain. You can check out this resource to learn more about the Resource Pathways framework from smart people at Harvard, and I’ll also try my best to explain below.
The first and most important question you are answering when you are building your talent strategy is: where are we going as an organization, and who do we need to get us there? Note: please understand you are building a hypothesis. If this were an equation, we’d have far more successful companies.
Q: Ok, so what are your options? You can build, borrow, buy, and repurpose.
A: Build: This talent is a moldable more junior resource who is eager to come in and learn. Because they are early in their career or just making a career transition, they are expecting lower compensation. This could mean they are looking for compensation in the 50th percentile or even a little below. Most important to this talent group is the ability to learn and grow. They want to see progression available within your company and a clear understanding of when and how they can increase their compensation in proportion to their effort.
Buy: This talent has been there/done that. You are hiring a seasoned veteran to come in and do what they did in another company. Because of their experience, they can demand higher compensation. Maybe they are looking to be in the 75th percentile instead of the 50th. This talent group might be most focused on cash, variable, or equity compensation and/or they may be more focused on work/life balance if this is their second or third startup or high growth experience.
Borrow: This is the fractional model. Here you are usually getting ‘buy’ talent on a part time basis. This could also mean offshoring. As an example, some companies use accounting teams in the Philippines. This strategy can be short term or indefinite. We’ve seen it work both ways.
Repurpose: This is where I’m going to take someone who was in a buy position, and move them to a build position because they are learning something new, or vise versa. Sometimes you have talent transitioning from ‘buy’ to ‘borrow’ as they are no longer needed full time or maybe they want to transition out and begin consulting. Typically this strategy is more about the person than the role. We know companies grow faster than people do, so repurpose should feature heavily in your annual planning to make sure your team and company is set up for success.
Q: Makes sense. What are some mistakes you have seen with talent strategy and hiring?
A: Well I think the obvious answer is misclassifying the talent strategy for a specific role. Maybe we want ‘buy’ talent, but we only have budget for ‘build.’ We can test the market and see if we get a bite, but we might have to re-configure how we think about the role. I’ve also seen companies hire “buy” talent that doesn’t want to build their ‘build’ talent. If you are hiring a ‘buy’ person who will grow their team, make sure they enjoy the management part and are not just a great individual contributor, because your whole team will be frustrated.
The last answer is not defining the talent strategy at all. Or not looking at your current talent. If you are a startup, roles and needs change rapidly and the best thing you can do is to build a framework, measure and modify.
Q: Ok. So I have my hypothesis for each and department in the company (current and protected). Now what?
A: Once we have our hypothesis, we test it. Does this make sense? Do we believe this talent exists? What measurements can we take throughout the year to make sure that it’s working? Is that a quarterly cadence?
The last question is if it’s financially feasible? I break this out because there are 7 compensation philosophies to choose from. That’s a topic for a different day, but you’ll need to hypothesize how to compensate for your build and buy talent, and how to budget for your borrow talent. But for now, let’s start here. Answering the question, where are we going, and who do we need to get us there is a great start!