Originally published on the Vistage Research Center
Mid-size companies generate 60% of new jobs and employ about one-third of U.S. private sector workers, yet these firms consistently report difficulties with talent management, including recruiting, hiring, and retention. There’s work to do, so it’s time to roll up your sleeves and take control. The acute workforce challenges you face—and the solutions—are clearly presented in “Help Wanted: How To Find and Develop the Talent You Need to Grow,” the Fall 2017 report created jointly by the National Center for the Middle Market and the Metropolitan Policy Program at Brookings.
The report confirms what I’ve been telling middle market companies for years: Your size can be a strength or a weakness. It’s up to you to determine which it will be.
You help drive our economy, but talent issues can limit your growth
As a middle market company ($10 million to $1 billion), you can take pride in the fact that you are a key driver of our economy, creating more jobs than any other sector. The research shows that, taken together, companies like yours:
- Provide about one-third of U.S. private-sector jobs;
- Account for the largest share of private job growth—about 60 percent of net new private sector jobs; and
- Saw payroll growth of 3.7 percent over the last 5.5 years—more than twice the rate of either small or large companies—and up to 4.7 percent in the first half of 2017.
Despite the positive overall numbers, you likely face significant hurdles in finding and keeping the talent you need to grow, especially as Baby Boomers retire and the talent pool shrinks. You need to act now to remain a driving force in our economic engine. Already, almost four in ten middle market companies say their growth is restricted because of a lack of talent; and 44 percent can’t find candidates with the skills they need. These challenges are most critical at top level positions, but apply up and down the skills ladder, across both technical and soft skills.
Acknowledge areas of weakness
Compared to larger organizations with more diverse resources, growth for middle market companies is more directly limited by their talent needs. This is made worse by the increasing talent inventory problem—an issue of supply and demand. It’s just simple math.
And that’s not all that plagues middle market companies. You operate within a set of unique circumstances that restricts your access to talent. Typically, middle market companies:
- Lack extensive brand awareness, so don’t have a large pool of candidates knocking at the door.
- Have a leaner HR function with less robust talent forecasting, recruiting, and training capabilities, which can mean losing qualified candidates to larger companies.
- Maintain a stronger HR focus on the transactional versus strategic, stifling creativity in talent acquisition and management.
- Lack a strategy for identifying current and future skills gaps and a succession plan for key positions.
- Can’t offer as many opportunities for professional development and career advancement, impeding both retention efforts and the ability to groom talent from within.
- Get fewer resources than larger companies from external sources like educational institutions, trade associations, and governmental organizations, limiting workforce development.
All of this may make you feel that you’re operating with one hand tied behind your back. But there are many excellent ways to overcome these hurdles, and put policies and processes in place that will solve your people puzzle way into the future.
… But also recognize your power and strength
Here’s some good news: One of the top five things employees want from their jobs is a sense of purpose; and as a mid-market employer you can offer more opportunities to do meaningful work and more directly contribute to your mission than large corporations. Your purpose and culture is an important strength, and competitive advantage you can bank.
You’ll have to do the rest of what it takes to improve your situation by taking a proactive role in your recruiting, training, and retention efforts. Neither blaming outside forces for your talent woes, nor waiting for them to rescue you, will secure your company’s future. But you can, using the valuable advice from this report.