Today's Wall Street Journal article on Keeping "overqualifieds" on board inspired me to take a deeper look at the impending rush for overqualified talent to find better opportunities as the job market begins to open. As Joe Light points out, turnover is still low, but slowly gaining momentum. In fact, BLS statistics report that employees who voluntarily quit their jobs in September was at 1.6 percent--up from 1.3 percent the same time last year. As the economy and job market continue to improve, these numbers will likely grow.
Companies who hire overqualified talent simply because they are less expensive should expect turnover in their organization. For this reason, companies should have a plan in place for when things do improve. Consider offering retention bonuses, implementing compensation pools, and helping employees define a career path within the organization. Like Google, companies need to be proactive versus reactive, or they might find their actions will be too little and too late.
However, if firms hire top talent and pay them at the appropriate wage for their experience and responsibilities, they'll likely experience less turnover. It's hard to justify overpaying your employees based exclusively on their qualifications rather than the ROI of their role in the company.
By helping them establish a career path within the company (and setting up a pipeline of strong candidates behind them), you're setting yourself up to handle anything that may come along when pastures are looking a bit greener.
Unfortunately, there is still a looming unemployment mountain for candidates to overcome in the job market. For every fortunate, talented candidate who finds a job (or a better paying, more fulfilling job), there are many more waiting in the wings for such an opportunity. And while there is an abundance of potential talent, many organizations will not see any urgency in retaining and engaging their top talent.
So what can businesses do to adequately prepare themselves for this turnover?
First (and most importantly), determine if your company is a "great" one or simply a "good" one. This could be the difference in retaining or losing some of those top candidates. In addition, you have other hurdles to overcome if your reputation precedes you.
Second, businesses should understand why they hired overqualified talent in the first place, and create and implement a strategy that is in line with their initial objectives. If your goal was to take advantage of the market to upgrade your talent, then take Google's path and start to compensate your employees accordingly. Communicating your strategy with your employees and recognizing them appropriately is the first step in retaining this talent pool.
But, if your company took advantage of the market because the opportunity presented itself, and that's the beginning and end of your plan, remember that sooner or later, you get what you pay for.
This post was written by Doug Lubin, a successful Recruitment Process Outsourcing (RPO) Practice Leader and Consultant, who brings over a decade of expertise building sustainable solutions for clients and partners. Doug helps firms develop high performing talent acquisition and management strategies locally and globally. Learn more about Doug.
