In this eight-part series, we will take a close look at eight different factors that will affect your company’s ability to attract and retain top talent in the marketplace.
Previously in this series, we’ve considered company culture, below-market compensation, and an ineffective hiring process as factors that may inhibit your ability to fill open positions with quality people. In this post, we’ll shift our attention to an external factor that may not always be within your control: talent supply.
It’s Like Selling Snow to a Bostonian
Back in February of this year, entrepreneurs everywhere got a kick out of Boston resident Kyle Waring’s bright idea to make a profit off the record-breaking snowfall in his city. Waring decided to do his part to dig the city out from under its 100+ inches of snow by packaging the fluffy stuff up and selling it online. Floridians and other warm-weather dwellers could purchase coolers full of snow and have them shipped overnight for an instant snowball-fight-in-a-box. As the rest of the country looked on in admiration, Waring capitalized handsomely on a fundamental economic concept: the law of supply and demand.
Waring’s idea was a roaring success that garnered national attention partly because of its tongue-in-cheek audacity and partly because Waring did what any successful business must do. He identified a niche and filled it. His only caveat? He wouldn’t sell snow to anyone in Massachusetts.
Three Hiring Takeaways from Kyle Waring’s Snow Business
What does selling snow have to do with hiring good people? Successful hiring relies on one of the same principles that successful marketing does: supply and demand. Let’s look at three takeaways from Waring’s story that we can apply to the hiring industry:
- Where supply is small, demand is great. Waring sold most of his snow to people in Florida and California where snow is rare. In terms of hiring, you are the consumer looking for a rare asset. The reason the war for talent exists at all is that top notch, qualified people aren’t a dime a dozen. Remaining competitive in a global marketplace requires emerging skills and qualifications to keep your business on the front edge of technology and current trends. Finding people with these skills isn’t easy. Depending on where you do business, the demand for a given position may be greater or smaller, but the fact remains that you are competing with numerous other businesses for the same talent pool. The best people may have multiple businesses interested in them, which means you’ll have to up your game if you want to win their attention.
- Neither supply nor demand is static. February was a great month for snow sales, but August? Not so much. As you consider your compensation, remember that what was a fair wage ten years ago probably won’t be considered a fair wage today. Compensation should reflect the changes in supply and demand that occur over time. As business needs have changed to require greater knowledge and innovation in particular fields like IT development, demand for talent in those fields has skyrocketed. As we’ll see next, high demand necessitates better compensation.
- When demand is high, you must be willing to pay the going rate—or better. While Massachusetts residents wouldn’t have dreamed of paying for snow, people in warmer climates willingly shelled out $89 or more for their snowy experience. If you want to attract top talent, you may need to adjust your concept of fair compensation. The current market will determine what the going rate for a given position is. If you want to remain competitive, you’ll have to offer at least the current market rate to a quality candidate in order to be considered. At Hire Velocity, we calculate demand based on open positions in your industry and geographic area, and we compare those reports with the talent supply. When demand is high and supply is low, compensation should increase.
Staying in Budget When Competition is Fierce
If your budget doesn’t allow for a top tier salary, there are other options you can consider to attract the talent you need. For example, you could offer a signing bonus in exchange for a two-year commitment, lease a company car for the employee, or offer another incentive. It can also be helpful to take a second look at your job requirements. If you can train for some qualifications on the job or consider fewer years of experience, you may be able to hire a less experienced person at a lower compensation rate. This option may also enlarge the pool of potential candidates you can draw from, giving you more options and better opportunities to find a good cultural fit.
Kyle Waring’s innovation gave us all a chuckle, but the war for talent is no laughing matter. Attracting and retaining top talent has direct bearing on your business’s ability to compete in the marketplace. While supply for certain positions may be limited, above-market compensation and stellar benefits can help you win the attention of the best candidates.