Transcript
Speaker: Middle market and the workforce. Hear how a leading national expert is thinking about these issues and tips and opportunities for middle market leaders to think about their own workforce. Welcome to The Market That Moves America, a podcast from the National Center for the Middle Market, which will educate you about the challenges facing mid -sized companies and help you take advantage of new opportunities.
Speaker: Welcome to The Market That Moves America. I'm Doug Farron, managing director of the National Center for the Middle Market. Joining me today is Dr. David DeLong of Smart Workforce Strategies. Dr. DeLong is an author, speaker, and consultant to organizations to find solutions to skill, shortages, and knowledge loss. He's also a research fellow at the MIT Age Lab and is taught in the MBA program at Babson College. Welcome, Dr. DeLong.
Speaker: Great to be with you, Doug. So can you tell us a little bit more about your background and some of the research that you've done in your career? You've got a very interesting history. So just like to learn a little bit more about that. Sure. Sure. For more than 30 years, Doug, I've been really interested about the intersection and the interplay between technologies and skills. Actually, skills, roles, and relationships in the workplace.
Speaker: I've done research and written a series of books on the changing workforce and changing technologies and the implications that has for employers in finding and developing talent, the talent they need to grow their businesses.
Speaker: I continue to work across sectors. I do a lot of work in manufacturing and healthcare, but many different industries on finding and implementing solutions.
Speaker: for companies, for organizations. And naturally, a lot of my work ends up being in the middle market because there are so many middle market companies. But that's just a background. More will come out as we talk, I'm sure. Yeah, sure. So just as a follow up to that, I mean, what are some of the maybe bigger differences that you see between middle market companies and say,
Speaker: large organizations, I don't know if we want to say Fortune 500 necessarily, but since you've worked across a lot of different ones, I mean, what do you see that's maybe unique or specific about middle market companies? Sure. One of the challenges that they face is particularly at the smaller end of middle market, they don't have the resources in place, the human resource department, HR departments,
Speaker: so they don't have the time and the resources and experience in place to deal with the intense challenges that companies face today in recruiting, developing and retaining skilled and even relatively unskilled talent.
Speaker: In addition, facing the challenges of leadership development, developing the next generation of leaders, the leadership pipeline in this country is dangerously thin because of so many baby boomers retiring.
Speaker: Frankly, leadership jobs becoming so much more complex and demanding, and the people who are prepared to fill those jobs are not necessarily readily available. Often, middle market companies find themselves challenged in addressing leadership development issues as well as issues of recruiting, developing, and retaining skilled and even unskilled talent.
Speaker: Sure. So we're here to talk today about that issue, workforce specifically, a lot of the data that the center has been collecting has shown that this is a huge problem. And I know, you know, this is kind of a general issue across business in the US today. So given the low record, low unemployment,
Speaker: How does that impact the labor pool that's available and challenges that companies face in finding a variety of workers, whether it's high, medium, or low skills? Sure, Doug. Well, a lot of employers tell me, David, we just can't find people who will show up and pass a drug test today. We have good jobs available that pay well. We're willing to train people.
Speaker: And yet we can't, we just can't find the bodies of people who will make themselves available or have showed an interest in coming and learning and being trained. So really the low unemployment rate has
Speaker: has created huge problems for employers at multiple levels. You have that entry level problem of we can't find people who show up. Then you have the problem of hiring skilled labor, whether it's nurses, engineers, accountants, whatever the role is where there's historically a professional training program for them and logical career paths.
Speaker: And there are tremendous shortages in those areas too. I had a CEO in northern Minnesota tell me recently, David, we can't hire full -time workers anymore. They're just not out there. So we actually have to look at part -time candidates.
Speaker: And that actually enhances our pool, but there are definitely people interested in that role. And then at the high end, the leadership, the low unemployment means you've got gaps in leadership too. And the challenges of filling a leadership role in a complex business just
Speaker: They're just incredible because people need to know so much in order to fill these roles or they have to be prepared to learn so much when they come into an organization to learn the customer base, the processes of the organization, the technology of our organization, the culture of the organization. It's just tremendously challenging.
Speaker: Sure. And then of course, once you are able to find some of those workers, the next challenge becomes retaining them, right? Making sure that they stay with your organization. So I guess my next question for you would be, you know, in all the various groups that you speak with and a lot of the companies that you consult for, are there any good strategies that you're seeing out there or maybe some unique things that you've seen that companies can do to address kind of the retention issue?
Speaker: Sure. Well, the first thing is diagnosing your risks. It may be inconvenient and annoying to lose a bookkeeper, but it's much more serious to lose a production manager or a senior engineer or a high potential young engineer.
Speaker: out of a role that's really hard to fill. So the first thing is prioritizing, you know, where the risks are most critical and where the risks and the loss of knowledge are most critical.
Speaker: And then another is to conduct. I'm often steering people. I ask my audiences a lot when I speak, I say, how many of you do exit interviews? And a lot of hands will go up. Well, I say,
Speaker: How many, how many of you do stay interviews and you know there's a lot of quizzical looks and really what I'm talking about is a process. There's a book on stay interviews you can buy on Amazon for 10 bucks.
Speaker: that lays out a process to be talking to your employees while they're still there before they're thinking of leaving to make sure that what you're doing for them is meeting their growth needs and really being clear about the obstacles that you might help remove from them that may lead them to leave sooner. So it's really making sure you're investing in
Speaker: in the cultural and work process factors that keep people happy, frankly, and engaged and wanting to stay with you and make sure you're not blind to those because something that a more experienced employer may not see as a problem can be a huge issue for younger talent. So that's a key issue. The whole notion of mentoring. In my research,
Speaker: I wrote a book, my most recent book was graduate to a great job, make your college degree pay off in today's market. So I've done over 50 case studies with millennials and the one thing they want is they want to be learning.
Speaker: And so what are you doing to make sure you're helping them develop and the question that employers and particularly this is an issue for middle market firms is we often don't have career paths that make sense for our younger employees where we can point and say look you keep doing this and gaining these skills and you will be able to move up in the organization well.
Speaker: The question, and when you sense employees are looking for what's my next promotion, the question that employers need to turn around and ask them is what are the skills you're trying to develop?
Speaker: in the short term how can we help you develop those skills because almost every employer in every situation you can help an employee develop skills you can't necessarily show them the next promotion the next job because yours may be so small enough that there that job isn't obvious or isn't gonna be open short term but you can help them develop their skills and that will keep them there longer.
Speaker: And one last thing, employers need to think less about lifetime employment, not be thinking, how am I going to keep this person here their whole career? But how can I extend their tenure with my company? So if you have an employee that comes in thinking they're going to stay two or three years,
Speaker: If you get them to stay three to five to seven years, that's a win for you. And we have to look at that. Look at our employees that way. How can we extend their stay? And that will often be by focusing on the skills we can help them develop. Sure. And so what you're saying is this isn't necessarily just an HR issue. This has to be a focus of the entire organization from the senior leadership team all the way down.
Speaker: And one of the things that companies need to do is they need to look hard at their leadership team and really evaluate them as how important they see talent, their individual managers and leaders see talent development as a key part of their job. Big companies like Coke and Cisco have a framework for evaluating their leaders and they'll look at them as either
Speaker: innovators, who are people who are senior executives and managers, who are always looking for new ways to do creative things with their talent, to keep them engaged, and to develop them. That's innovators.
Speaker: Champions are people who don't necessarily come up with new ideas or new ways of leading their staffs, but they'll definitely put money behind it. They say, you tell me what to do, you come to me with a proposal for the developmental proposal for these employees and I'll fund it.
Speaker: Third are sort of the people who go along who just sort of say, whenever HR tells me I have to do an employee review, I'll do it. Just tell me what to do. And then the fourth are really laggards who don't see talent development as anything to do with their role, as relevant to them. I had to pull myself up on my bootstraps. I had to do it the hard way. They need to learn to do it that way.
Speaker: These are leaders you need to be very cautious about promoting because they're going to really undermine your workforce and your talent base going forward. And you just can't tolerate this attitude in your leadership today. You mentioned a little earlier the resource constraints that a lot of particularly lower middle market companies are under.
Speaker: Are there any good organizations that you've seen out there that companies could perhaps collaborate with or partner with that would help them with some of these developmental issues or retention issues around education, training and development and so forth? Sure. Well, if you're a smaller company by smaller, you know, we mean, again, at the lower end of the middle market, you want to make sure you're exploring and networking with
Speaker: Unfortunately, it's very contextual in that you may have a local chamber of commerce that is really in your region or city that is really savvy about these issues and has got some great leadership that wants to do things and is trying to pull together collaboratives of employers
Speaker: who will work together on these issues, then working with schools locally, but then frankly, in some cases, the chambers are just behind the times. Or the local economic development or workforce investment boards are just not up to the task. They're not really leading the charge in the ways that employers need.
Speaker: So, it's really important that, so employers need to look at their chambers, they need to really touch base with their local community colleges. Because I'll tell you, the community colleges that I talk to are very anxious to serve their employee base. Now, there are definitely challenges with the community colleges in that they don't always react as fast as employers want them to.
Speaker: You know, they're a little, they have faculty issue, limitations, restrictions, faculty capability restrictions. And they're sort of fast followers. They'll tell you the community colleges and even high schools.
Speaker: Savvy High Schools will tell you that. You know, we'll do things, but we need to know from employers what they need. So you need to be reaching out to these schools and building relationships with both community colleges and high schools locally, if that's relevant to your market, to be looking at internships and apprenticeships possibilities. And that's a really important thing for
Speaker: Again, companies on the smaller end of the middle market to be engaging with young talent, maybe even before they are ready. There's a thing I call the Larry Bird Rule. Larry Bird's the old Boston Celtic who was drafted from Indiana State.
Speaker: by the Celtics a year before he actually came out. He went back to college and experts said, oh, that was a wasted draft pick. Well, of course it wasn't because he went on to lead the team a year later, starting a year later to great things, but employers need to then
Speaker: The point is employers need to sometimes be willing to bring in younger talent, maybe high school seniors or college freshmen who aren't quite ready to be super productive interns, but they want them to get to know your company. You want them to get to know you and then you bring them back the following summer into a more productive role when they've had some engineering courses or they finished high school.
Speaker: and where they can start adding value as a really adding value as an intern or an apprentice and get to know you before they get picked up by the bigger companies. See the problem is for smaller firms the bigger companies have more elaborate internship and apprentice programs and once students get into those programs they're likely to be gone. You know they're going to be paid too much you know more than you can afford so they're just not as as available to you.
Speaker: So let's flip the coin a little bit and talk about the other side, which is the candidates or the employees. A lot of times, middle market companies may not have the most recognizable brand names. They may be hard to find, but if I'm a potential employee or I'm looking and
Speaker: I've worked at a big firm and maybe didn't care for it or have worked at a smaller startup and that wasn't the right fit either. So kind of come to the conclusion that maybe the middle market's the place to go. What are some things as a candidate that I could be doing to make myself more marketable, attractive, connecting with the right opportunities and so forth?
Speaker: Sure, of course it depends on your age. If you're, and because I've done a lot of work with older workers, you know, in researching my book lost knowledge confronting the threat of an aging workforce.
Speaker: I'm very cautious in advising older workers, when I say older job seekers, 58 or 62 or even anything over 50, 55, you start to look differently to employers.
Speaker: Older job seekers sometimes underestimate that if you're 28, you're in a totally different, you know ballgame So age is highly relevant here I think frankly experienced older workers can be a great asset to middle market companies as long as they're really those those job candidates are brutally clear about the value they bring and
Speaker: to, can bring to an employer. The job search market has just changed so dramatically for employers and a danger for an older, more experienced job candidate who's been out of the market for some time is they don't realize how, it's really ironic Doug, as much as there's a talent shortage, there's also really a shortage of
Speaker: The job search process has become so elaborate and so difficult to navigate for job seekers that unless you're in a field like IT or nursing, a field where the market is just sucking up talent, they'll take whoever they can get.
Speaker: But if you're in sales or operations, you may have great skills, but you've got to be really articulate at how you articulate those skills to employers. And you've got to look so carefully at the job postings that are put up. And the wording in your words
Speaker: The words you use in your cover letter and in your resume have to really match up with the postings that are being seen because otherwise you'll never get an interview. You won't get recognized. And this again, it just doesn't matter whether you're 58 or 28.
Speaker: you have to understand the hiring process, the realities of the hiring process. You also want to start to develop relationships using LinkedIn. The first thing I do if I identified a middle market company that was a possible employer for me is I would be on LinkedIn and a heartbeat trying to find connections into that organization. People I can talk to
Speaker: you know maybe they went to my college maybe they used to work at my old company maybe they're a friend of a friend anything you can do to to to to arrange an informational interview where you're not it's not a job interview where you're not interviewing you're not applying for the job with them you're just having a conversation about
Speaker: They're getting advice and direction from them about possibly applying to this company or learning more about the company or whether it might be a good fit for you. Right. So let's take out your crystal ball for a second and think about the next, I don't know, two, three, five years. What do you think are going to be some of the big trends or areas that continue to influence the workforce arena?
Speaker: Sure. Well, the real wild card three to five years out is the impact of technology, of particularly artificial intelligence and neural networks and big data and all the ways that these technologies are going to be applied, whether you're in supply chain or manufacturing or healthcare,
Speaker: or aerospace, you name it. The technologies are coming so fast. You know, these really smart economists at MIT
Speaker: have done very rigorous studies of this. And they say we're now in a race between education and technology. And the question is, can we educate our workforce and our employees fast enough to keep their skills viable in the changing marketplace? And one of the great challenges for employers today is they're worried about staffing up in the next quarter or the next year. So where do I find people to fill
Speaker: fill in immediately now, but at the same time, they need to be looking out three to five years and thinking about what are the skills my employees are going to need going forward, given the changing technologies and the way we're going to be bringing technology into the organization, into our business processes, and what skills are our employees
Speaker: employees going to need to be effective and what are we doing to develop those skills or to find them in new job candidates. So that's one of the big wild cards. Okay. So you've already given us a lot of great insights and tips, but
Speaker: If you were talking to a middle market CEO who wanted to talk to his or her leadership team about their own workforce, what would be some advice or some areas that you think they would want to start or consider? Well, again,
Speaker: First of all, you've got to prioritize your risks. You've got to really be clear about who are the people that would be most costly to lose or that you can't afford to lose and getting your managers to really focus on those employees and backfilling there or
Speaker: developing other talent that could step in there or that could be a successor. So prioritizing is one. Making sure you're doing everything you can to provide development opportunities for these employees.
Speaker: you know, developing their skills to keep them engaged. Another real big challenge for CEOs is getting their leadership team to be team players. There's a great tendency in organizations to want to hoard talent.
Speaker: in your vertical silo or in your function. So you get great employees and sometimes managers will sort of hide those people from the rest of the organization. When they really, and we have to think more systemically, that's one of the great challenges for CEOs is getting, particularly in the bigger middle market companies, is getting executives who can think systemically and think about the organization as a whole and not be overly focused on their function.
Speaker: So that's another piece is getting them to share talent and to be aware that it's most important to keep that talent within our system, within our company overall, as opposed to just within our division or function. Right. Dave, is there anything else you'd like to share with us today?
Speaker: Well, no. I hope you can tell from this conversation that I'm very passionate about these issues and the challenges that leaders face and the opportunities to solve them. And these are not going to be simple problems. They're going to be with us for the rest of our careers.
Speaker: Talent and the skill shortages are not going away no matter what happens in the economy even if the economy softens for a while there may be some temporary relief but it's gonna be with us that dealing with higher skilled talent and continually accelerating those those skills is gonna be an ongoing challenge and
Speaker: people are welcome to visit my blog at my website, which is smartworkforcestrategies .com, all one word, smartworkforcestrategies .com. And I welcome the idea, the opportunities to share my research and speeches and workshops and some consulting and continue to
Speaker: do research in this area avidly because there are so many exciting issues and challenges facing leaders. I appreciate this opportunity to share some thoughts with you and your audience today and I've been very impressed with the work you're doing there at the Center. I think you're in a really
Speaker: a sweet spot in our economy and dealing with these companies from 10 million to a billion and the challenges they face. So thank you for this chance to share these ideas.
Speaker: Well, sure. Yeah, thanks for joining us. I'd like to thank Dr. DeLong for joining me today for a great discussion on workforce in the middle market. For more content on these topics and others, please visit our center website at www .middlemarketcenter .org. You can also subscribe to the podcast there, as well as on iTunes, Stitcher, and wherever good podcasts can be found. Thank you for listening.
