Despite a sluggish economy and relatively high unemployment, HR has seen little relief from its struggle to find and keep good people. In a recent research report, "Sustaining the Talent Quest" from New York City-based The Conference Board, nearly 90 percent of responding HR executives said they were having trouble attracting and retaining talent. Though the respondents said the problem was not widespread within their organizations, employees with high-value skills, industry-specific knowledge, and leadership competency remained hard to find and keep.

How can HR address talent issues now, so that they can position their companies for growth and profits when the economy picks up?

Develop Relationships

"Recruitment touches a lot of bases," says Jeff Levin, director of human resources at MedImmune, Inc., a biotechnology company in Gaithersburg, Maryland. "You're looking at colleges, different professional associations, Web sites, print, and so on. Even if you're not hiring, you can always work at developing your relationships with and through these venues."

Trudy Wilson, HR manager at DataChem Laboratories, Inc. in Salt Lake City, Utah, echoes that thought. "We've had very low unemployment in the past, which has sometimes made recruiting difficult," she says. "But in the past year and a half, we haven't seen anyone leave because they were looking for another job."

Despite her relatively easy recruitment environment today, Wilson still works on her relationships with colleges and universities, from which she draws much of her talent. "I attend as many job fairs sponsored by colleges and universities within the state as I can," she says. "A lot of my focus at these fairs is name recognition, letting students know who and where we are.

"We hire many of our employees as technicians when they're college students; after they graduate, we promote them to Chemist 1," continues Wilson, who is taking advantage of the recruiting lull to look at HR policies and procedures. "We're examining career ladders for employees," she says. "Our chemists typically enjoy their lab work and want to progress within the chemistry career ladder, though we also promote from within for our management positions which come open."

Her focus is a wise one: The Conference Board's talent report shows that an uncertain work environment and limited career opportunities are two of the top three obstacles to successful attraction and retention for companies (the third was disagreement or dissatisfaction with supervisors). The Board's prior talent reports also show these same two obstacles in the top positions.

Overcoming these obstacles requires relationship work with existing employees, who are not a "sure thing" for a company even after they accept a job. Online job search company CareerBuilder polled 2,200 hourly and salaried employees, and found that 35 percent of them planned to change jobs in 2003. Seventy-two percent of respondents to a survey by electronic job board Monster said that they were unhappy with their employment status. Many industry experts predict that turnover will begin to rise dramatically once the economy recovers and employees feel they have more options.

Managers play a critical role in building relationships with employees. One of the first—and most important steps—they can take is to recognize employee needs and strive to meet them. Levin says that MedImmune has historically placed an emphasis on career development. "We want to recognize our employees for what they do, but managers also say 'Oh, you want to go into this area—let me see if I can find a way to do that'," says Levin. "That recognizes employees as individuals."

Jerry Lukach, vice president of human resources at Eastman Chemical Company in Kingsport, Tenn., says that his company has always tried to be cognizant of talent management and retention issues. "Do employees enjoy the work they're doing? Are managers concerned about employees and helping with their careers? Does the company invest in employees through training and so on?" He adds, "You can't just turn this on and off-it has to do with culture and the way you run your business."

Learn From Metrics and Best Practices

An October 2002 report "How Leading Organizations Manage Talent" by Towers Perrin, a global management consulting firm headquartered in Stamford, Conn., identified several best practices among 22 leading companies recognized for financial performance, employee retention rates, and external ratings. These companies:

• Have a clear talent management strategy
• Combine innovative approaches with traditional tools to identify and select key talent
• Use technology to streamline processes and information sharing
• Engage employees in the business so they see a relationship between what they do and how the company performs
• Base key elements of pay on performance and clearly differentiate rewards for individual performance
• Identify and develop high potential employees
• Offer flexible total reward packages
• Develop their managers

Additionally, many of these leading companies use metrics to analyze their success. Cost per hire, time to hire, offer to acceptance ratios, success of hire (based on later performance ratings), and turnover rates are common metrics for recruiting, but some companies have included talent management metrics as well. Managers, for instance, may be held accountable for retention, or for how effectively they're creating opportunities for high performers.

Companies usually focus talent management activities on their best performers, identifying them early in order to groom them for bigger contributions. Talent review programs rely on performance evaluations, and often leadership reviews as well.

Managers review these top performers more frequently than other employees; they may also send them to in-depth assessments. Additionally, managers provide coaches or mentors to top performers, include these employees in succession planning strategies, and provide development opportunities. Top performers are rewarded for their contributions, often through individualized programs that cater to their career needs or interests.

Look To The Future

A lull in recruiting is a good time to implement new systems, refine techniques, or analyze data. And even though hiring is not up to former levels, many companies say that hiring does continue. In the Towers Perrin report, 73 percent of managers said they were aggressively recruiting in targeted areas even while they made cuts elsewhere.

"We're up to 60 - 80 percent of what was normal hiring in the past," says Lukach. "We've been through five years or so of steady attrition and now need to replace some people, though probably at a 1:2 or 1:3 ratio rather than 100 percent. "We've used the last couple of years as an opportunity to learn about Internet recruiting, and put in a new applicant tracing system. We still get a lot of unsolicited resumes, and there's sometimes gold in them," Lukach continues.

Getting the right candidate "fit" is increasingly important to leading companies. These companies are identifying the skill sets they need and fine-tuning their recruitment process to identify candidates who possess them. Technology based tools like resume filters and on-line assessments are popular, but leading companies combine technology with "high touch" elements like employee referral programs and team interviewing.

Levin suggests HR team with managers to come up with "success factors" for the positions they need to fill, and then communicate these finding to interviewers. "Explore with hiring managers what they're really looking for, and what questions would be relevant for interviewers.

"Maintain your standards," adds Levin. "When vacancies have stretched out for a long time, there's a tendency to say 'let's take a chance on this person'. Don't do it."

Afterward, spend time helping newcomers fit into the workplace. Though they can be customized endlessly, good orientation programs are a must. Experts say that it's important to go beyond filling out forms and introducing a supervisor; good programs tell employees about corporate culture and help them continue to feel good about the choice they've made to join their new company. Increasingly, onboarding programs introduce business goals and help employees understand their role in adding to the company's success.

Lukach believes there's a growing trend for HR to become more linked to business issues. "We try to educate our employees about business issues," he says. "We believe employees can contribute better if they understand things like what they need to do for the company to make a profit."

Likewise, he says, HR should understand what the company is trying to accomplish and how that relates to people. "When hiring does pick up, then HR can say 'I've been thinking about this and know the type of person we need'," says Lukach.

No matter when the economy actually recovers, demographics suggest that the recruiting "breather" many companies have experienced will eventually come to a close, bringing fierce competition for the best employees on its heels. HR departments that develop strong relationships with their recruiting pipelines and with current employees will be in a strong position when hiring heats up. By coupling strong relationships with a strong talent management program, HR can guide a company strategy that attracts and retains high-performance employees.

Carla Joinson is a Stafford, Va.-based writer specializing in human resources and management topics.