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The Consumer Candidate and the Engagement Cycle

Adapted from Finding Keepers: The Monster Guide to Hiring and Holding the World’s Best Employees by Steve Pogorzelski and Jesse Harriott, Ph.D., with Doug Hardy

Summary: In addition to the demographic trends driving skills shortages in advanced economies, Monster’s recent research reveals at least two factors that disrupt talent markets. These three waves of change are converging worldwide to create a talent tsunami in the workforce, shifting power from the employer to the talented individual, and they are (1) the well known demographic pressures caused by falling birthrates, (2) candidate empowerment, and (3) the increasing value of talented employees relative to other success factors. Based on our findings, we propose an expansion of the recruiting function to create not just hires but long-term engagement with an employer’s brand.

Demographic trends
Global trends in population and education form the first wave of change. Because the facts of these trends are well known, we will only briefly review them here:

In the next few years, retiring workers around the world won’t be fully replaced by the workers that follow. Low birth rates across the European Union, the U.S. and the developed countries of the Pacific, as well as the aging of populations across the industrialized world will exacerbate these demographic trends in many world labor markets both now and in the long term.

Aggravating the problem is the fact that schools aren’t preparing enough young people to fill the high-demand jobs. Science and engineering degrees have declined relative to the workforce for two decades, while jobs in those fields remain among the fastest growing. As globalization and international hiring expand, further educational issues arise. Language deficiencies, for example, are one obvious barrier. Educational quality also varies widely among countries. A 2005 McKinsey & Co. survey determined that only 13 percent of college graduates in low-wage countries were suitably qualified to work for multinational companies.

Candidate Empowerment
The second wave of change is the growing power of the candidate in the employment equation. The Internet makes it easy for any candidate, whether unemployed or working, to locate new opportunities quickly, research the company and salary, and quietly apply online. It has become much easier for employers to locate great candidates in online résumé databases, and tempt them away from their current organizations. The stigma of “job-hopping” is all but gone. Talent can easily look to other regions or countries for opportunity, especially across the E.U., regionally in the U.S., and within multinational companies.

The result: Monster’s recent workforce survey identified almost 70% of the employed workforce as “poised,” that is, willing to entertain a new job offer whether they are actively looking for work or not. Today’s employee keeps a resume online, an ear to the corporate rumor mill and an eye on the door. Our employer surveys show that 50 percent of online job advertising is due to employee turnover, an indicator that talented people are on the move.

When people have a choice of jobs, they behave like consumers shopping among many products. If you want to attract the best, you have to compete for them. You have to offer them value. You have to understand why they might want to “buy” your company (that is, join your workforce). And then you have to get them to stay with you the same way that marketers gain loyalty—they offer consumers what they value, not once, but time after time.

Increasing Relative Value of Talent
The third wave forming the talent tsunami is the increasing value of talent to the bottom line, and the diminishing power of other assets to make a difference.

One by one the former advantages fall: capital flows much more freely than in the past; innovation is quickly copied; workplaces become decentralized (so location matters less); former monopolies fail to compete. These structural changes don’t mean the end of unemployment—when a business fails or moves, people lose jobs—but they do mean that talent is the remaining advantage.

Talent creates the lion’s share of value in the developed world’s companies, and those who calculate the intangible assets of organizations (know-how, patents, brand names, ideas and processes) put the product of brainpower at 80 percent of a company’s value.11

Globalization plays a part: As businesses in advanced economies cede manufacturing and low-end services to emerging economies, their survival depends on the products of high-end talent. Information-rich products and services, business innovation, sophisticated new technologies, better management, and more creative solutions drive first-world economies.

Recession only delays the reckoning, and in any part of the business cycle, those with in-demand skills command higher wages and other concessions. During the 2000–2002 recession period, employment and wages for nurses actually rose because of the chronic shortage. Just as long-term investors regard market downturns as buying opportunities, smart organizations treat economic slowdown as an opportunity to build loyalty among its most valuable employees. Businesses who treat employees merely as “assets” to be valued like financial or physical assets risk a flight of talent once market conditions improve.

We believe that boom-and-bust hiring is inimical to building a great organization. A long-term relationship with top talent, characterized by a new kind of loyalty, is needed. This does not mean the organization has to hold onto its current employees forever (indeed, given the inevitability of change, this is impossible). How can an executive, recruiter, or manager find, hire, and retain top performers given these dynamics? How to compete in this marketplace?

The Engagement Cycle
When the candidate takes the mindset of a consumer, the organization must compete by adapting the tools of consumer marketing: Hiring has to become a marketing and branding practice, in which you Attract talent with a strong brand message, well targeted; acquire talent by delivering a recruiting experience that confirms the brand; advance talent by validating the brand promises in the real world of day-to-day work.

We refer to this three-phase relationship with an employee as The Engagement Cycle. It’s made of familiar components, but too often they are not connected in a continuous experience.

Google does it; Johnson & Johnson does it; Enterprise Rent-a-Car does it, and we even know small restaurants that do it brilliantly. It’s not just advertising, but a fully conceived, long-term practice of attraction using marketing disciplines such as profiling, segmentation and targeted outreach. It must be grounded in the understanding that talented workers view the employment market the way consumers consider a purchase.

As companies move from the hiring-as-transaction view to the marketing view, we see that employer and candidate follow a clear three-phase cycle in the course of their working relationship.

These three phases describe the level and quality of engagement between employee and employer, which we call the Engagement Cycle:

The Attract phase is a long-term “dance” between you and the candidate. It includes every activity meant to position the organization as a potential employer in the mind of a candidate. You project a carefully crafted, authentic image as an employer; they become aware of your organization’s specific attributes. Your employees spread your reputation as an employer; the candidate listens and assesses you as a potential workplace. It’s a similar dance to the way consumers are drawn to brands in the marketplace.

The Acquire phase involves all the interactions between you and candidates from the moment they reach out to you. You advertise a position and they apply. You treat their application a certain way, and they react. You find their résumé and approach them, and they judge you by your image and your behavior. Your interview process is a series of interactions with different parts of your organization. Both candidate and employer set expectations throughout this process that will be critical in making a good hire and later in holding onto the best talent. The Acquire stage also includes the honeymoon period right after an employee starts working, in which expectations will be tested against reality. In terms of consumer branding, this is the purchase of a product and its aftermath: Does the product perform as advertised? Is the customer so satisfied that he would recommend the product?

The cycle continues though a phase we call Advance, in which the organization keeps critical talent moving, not necessarily up through management ranks, but growing in experience, responsibility, money, or other tangible and intangible ways. Advancing talent in your organization is a key to retaining good people and vital to your company’s ability to change as opportunity or necessity require. In consumer branding terms, it’s the equivalent of customers becoming loyal to a brand and identifying with the brand’s attributes. It acknowledges employee autonomy by allowing a talented individual to craft a multifaceted and growing career within the organization, as opposed to leaving for a series of new employers.

This last phase might repeat over the time that an employee works at your company. A poised worker is always judging the employer against other potential employers. When talent is in demand, you have to re-earn its engagement constantly or risk losing it to someone else.

The Engagement Cycle is the long-term flow of activities that attract, acquire, and advance talent, and it is the interplay of the full cycle—both the employer’s three activities and the candidate’s responses—that creates a strong relationship. Figure 3-1 shows the parallel activities from the employer and candidate points of view.

Figure 3-1

The Engagement Cycle requires more attention than transactions because it is multidimensional and depends on the ongoing interaction. For example, it’s not enough for your outreach to be good; how you receive the candidate’s response is also important.

For the career-minded worker, employment is not a single event but a sequence of encounters: a candidate hears about an employer, maybe years before applying for a job there (but from the moment the candidate hears, he starts to form an impression). In the language of marketing, that first impression is a touch point. Sometime later the candidate hears about the company from a friend who works there. That’s another touch point. Perhaps he then uses one of the company’s products, or shops in its store; that’s another touch point. Then the candidate connects in a very specific way to an opportunity—a job advertisement, a network contact, a call from a recruiter who dug up his résumé. More touch points. Then the candidate applies for the job and goes through the process of getting the job. More touch points. And employment is in fact a series of touch points with the organization, just as a consumer brand experience continues beyond marketing messages to interaction with a product.

While the Engagement Cycle describes a relationship between employee and candidate/employee/alumnus, we think its strongest message should be heard by employers: The degree to which you gain an engaged workforce is directly related to the attention you pay to employees throughout the cycle.

The new practice of recruiting is mindful of the intangible as well as tangible benefits of employment and creates a vibrant, appealing employer brand to attract, acquire and advance the right employees. The new practice of recruiting attracts candidates by speaking their language, by communicating over the long term with many potential employees, and by studying their values, beliefs, and work motivations.

An attractive employer brand can gather candidates, but they will continue to test its authenticity through the Acquire and Advance phases of the cycle. Phoniness is a brand killer. This authenticity must come directly from hiring and supervising managers, not just an abstract organizational culture, an human resources employee, or “executive management.”

We believe mastery of the Engagement Cycle will determine whether an enterprise succeeds, survives, or fails in the coming decade. Talented individuals have little incentive to remain in an organization that does not acknowledge their power to choose, and their increasing importance relative to other business differentiators means that they will determine success. Those organizations that demonstrate a full cycle of engagement toward the candidate-employee-alumnus through his or her career, based on an authentic employer brand, will be rewarded with engagement in turn – before, during and after employment. Companies that integrate the Engagement Cycle to their particular business, culture, and mission will possess an abundance of the only remaining resource that matters—the human talent that is your company’s future.