How talent location and revenue (or lack of it) are linked
It goes without saying that having the right people in the right jobs is essential to business success, and to this end, many companies go to great lengths to source and retain the right talent. What many don’t realize, however, is that location matters too, though not in the sense you might think.
While companies in highly desirable locations often use it as a selling point when recruiting talent, what they should be doing, according to a recent research report, is sourcing talent for and in locations where their products and services do the best (or have the potential to).
Although there are instances where these places are one and the same, in most cases they’re not. Many companies and their executive teams are located in mature market hubs and/or “legacy” locations, says the report, while areas with the greatest revenue-generating opportunities are often elsewhere, in markets like India, Chile, or Peru.
The report, a collaborative effort between LinkedIn and Ernst & Young, is based on an analysis of 659 companies in nearly a dozen sectors. It notes, among other things, that when companies locate senior-level talent in their best locations (director and above), they generally perform better than those that don’t (in part because they can more effectively tailor and deliver their offerings to the local market). The report also notes that companies with “the greatest disconnect between the location of key employees and a company’s most profitable markets potentially lose millions in profits.”
So why aren’t more businesses jumping on the bandwagon? One reason is the time, cost, and effort it takes to establish operations in a new location, particularly a new entity in a foreign country. Another is talent, which can be hard to source for many types of positions, even in desirable locations.
However, there are several strategies companies can use – some familiar and others less so — that can increase the odds of recruitment success. In addition to a competitive salary and benefits, these can include:
Better branding: How is your company better than the competition’s? What do you offer that they don’t? Why do employees like working for you? How do you rank in your industry? Figuring out how this should be articulated in your most profitable markets, and doing so in as many venues as possible, will well position your company’s brand.
Creating a local talent pipeline: Hiring locally can be difficult for jobs that require highly skilled and specialized labor. To address this, many companies have successfully partnered with area colleges and universities to produce local workers with the needed skills. Some are also adjusting hiring requirements (EY, for example), such as the need for all employees to have college degrees. Beyond this, some companies are hiring candidates with backgrounds they wouldn’t have previously considered (e.g., people convicted of non-violent crimes, retirees, and those with autism).
Simplifying the application process: This should be as easy as possible, as those that are overly complicated have been shown to deter candidates. It should also be mobile friendly and neither too fast or slow.
Incenting employees to provide high-quality referrals: In some instances, this can may make a significant difference, as referrals are how many discover jobs and how many companies find new hires. However, companies need to provide decent financial incentives. By doing so, at least for hard-to-fill positions, employees may be more inclined to reach out to their contacts.
Flexible work: This, which can be more important to some than salary, includes flexible work hours and remote work (within region). An additional bonus, according to a 2016 Towers Watson survey, is that companies that allow this perform twice as well as those that don’t.