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Focus on the five percent

Focus on the five percent

by Scott Keller & Bill Schaninger

Recruitment is one of the most difficult things a company does, but doing it well can pay off. Consider that in highly complex jobs—those that are information- and interaction-intensive, such as managers, software developers and project managers—high performers are an astounding 800 percent more productive than average performers.

The competition for top talent is only going to intensify in coming decades. Employers in North America and Europe will require more than 11 percent more college-educated workers than will be available in 2020, according to a recent study by the McKinsey Global Institute. Developing economies will face a shortfall of 45 million workers with a secondary-school education and vocational training.

How to succeed in such a competitive recruitment landscape? In short: create a strong and distinctive employee value proposition that authentically represents workplace reality. Creating false expectations can lead to negative reviews on JobAdvisor and Glassdoor.

To avoid this, companies should focus their efforts on the 5 percent of roles that create 95 percent of the value. It’s not the most comfortable concept for leaders to grasp. Yet, in virtually every case where McKinsey started with the business strategy and identified its value drivers, we identified no more than a handful of roles on which success or failure truly depends.

At UPS, for example, a logistics routing engineer’s slightest adjustment can impact costs and delivery times dramatically – to the tune of hundreds of millions of dollars. At Walmart, the choices that omni-channel merchants make can determine whether the company’s bricks-and-mortar presence is a competitive advantage or albatross.

When Steve Jobs died in October 2011, some questioned how Apple would perform without its iconic visionary leader. Others noted the incredible talent the company attracted under his leadership. Jobs himself often urged, “Go after the cream of the cream… A small team of A+ players can run circles around a giant team of B and C players.”

With Apple’s share price having steadily risen since then, it appears that he was right. Successful companies recognize that getting the right talent in the right place can make or break their overall performance.

Once the 5 percent of roles that create 95 percent of the value are identified, the question becomes whether your most talented people are in these roles. We rarely find that the best leaders in the company are methodically deployed as such. Further, keeping the right talent in these roles typically requires significant adjustments to job design (removing administrative burdens), career paths (rapid advancement opportunities and special projects), compensation (above market), location (high flexibility), development (high touch beyond formal programs and the formal performance management process), leadership exposure and influence (more, sooner) and the like.

For most companies, even Apple, attracting and retaining top talent is a constant challenge. Chief executives participating in the Conference Board’s 2016 survey of global CEOs cited “failure to attract and retain top talent” as their No. 1 issue – ahead of issues related to economic growth and competitive intensity.

Ultimately, smart adjustments deliver a distinctive and tailored value proposition specific to each of the highest value-creating roles, and building on the general one that applies to all talent in the company.