Since McKinsey & Co first coined the term in 1997, the ‘war for talent’ has been the focus of a stream of conferences, media articles and consulting assignments. It has spawned a new human resources specialism – talent management – and with that has come concepts such as ‘competency frameworks’ and ‘succession planning’.
One of the most hotly fought fronts in the war for talent is graduate recruitment. Professional service firms, including law firms, accountancy practices, banks and consultancies, pride themselves on battling with other firms, competing aggressively for a very limited number of ‘the brightest and the best’ graduates.As one banker told us: ‘All the banks are in competition, gunning for that small pool of talent.’
However, not everyone is convinced by this narrative. Indeed, as another banker put it: ‘The war for talent is bollocks!’
During a recent research project we interviewed 80 senior professionals in five of the UK’s leading professional service firms to explore the concept of fighting to secure scarce talent, particularly in the context of diversity and inclusion practices. What we discovered – apart from the very wide range of views – was that everything hinges on how you define ‘talent’. Despite an abundance of suitably qualified and intelligent graduates, firms, however unconsciously, have managed to define ‘talent’ in such a narrow way that they have contributed towards the scarcity they apparently now seek to address.
How has this happened? The professions have historically been characterised by high status and high rewards, secured through exclusivity and an impression of scarcity. This exclusivity in turn depends upon the idea that both professionals and professional knowledge are distinctive, valuable and reserved for the few and the finest. It is this rarefied expertise that clients are paying for and – as is the way with markets – the more rarefied and difficult to access it is perceived to be, the more they are willing to pay for it. The impression of exclusivity and employing the brightest and best professionals are also how elite firms seek to differentiate themselves from their competitors.
The expansion of higher education over the past 30 years in the UK has led to two particular challenges for professional firms. The first is simply the profusion of suitably qualified graduates. How do firms identify potential and whittle the number of applicants down to a manageable amount? They cannot possibly interview everyone who has an appropriate degree, so they need some sort of shortcut to narrow the field.
For example, the partner in charge of graduate recruitment at one law firm said: ‘There are far, far more people applying with appropriate academic grades than there are places… selection is more problematic now than ever, just because of the supply coming through.’ According to a partner in an accountancy firm: ‘You need ability, but how do you judge it? How you cope with the numbers in the marketplace is just beyond me.’
Secondly, the professions are having to work harder to maintain their reputation for exclusivity. The growth in the number of graduates has led to a diversification away from the professional white, male, middle class ‘norm’. Since professional knowledge is closely associated with the people who produce it, constructions of professional knowledge as high status are considered particularly at risk when ‘others’ enter a profession.
An important means by which the field of candidates is narrowed (and exclusivity maintained) is the focus on students educated at a small sub-set of elite universities. Interviewees explained that preferred candidates are generally educated at the Russell Group institutions, with a particular focus on Oxford and Cambridge. Often, the field will be narrowed further as graduates will be appointed from universities and degree courses with which current staff are most familiar. In addition, our research has shown that firms exert strong preferences for graduates with certain types of social and cultural capital that are equated with middle or upper-class status, such as speech, accent, mannerisms and taste.
A strong focus is on appointing highly educated graduates no doubt, but also those who represent low risk or a ‘safe bet’. If most elite firms define talent in similar narrow terms, no wonder there does not seem to be very much of it.
This belief that there is a shortage of top talent has had a material impact on recruitment and selection processes within the elite professional service sector. It has been taken up and exploited by recruitment professionals both inside and outside elite firms. For example, the milkround traditionally involved firms wooing final-year students at the institutions from which it is already most likely to select. Nowadays, the milkround takes place significantlyearlier in the academic cycle, with firms visiting students during their first year at university, or even when they are still at school. This early contact offers firms the opportunity to secure ‘top talent’ early in the recruitment cycle and is positioned by recruitment experts as a response to extreme competition between elite firms within the war for talent.
Ironically, however, as many as half the people we interviewed were not convinced that the trainees they were getting at the end of this process were always the brightest and best. They underlined that selecting students on the basis of their university results in a homogeneous group of employees, usually from more privileged backgrounds, who often lack commercial aptitude, drive and ambition. As one partner in an accountancy firm said: ‘We satisfy our criteria recruiting the best people in the sense that we’re recruiting to a set of standards… but in terms of our ability to accommodate the sort of the people who might actually benefit our business, we’ve lost that.’
Social mobility and access to the professions is a hot topic at present. Those seeking change often speak of a shortage of talent as a motivating factor in order to encourage progressive change. Many firms have publicly embraced diversity and inclusion policies as a means to improve the supply of talented graduates. Yet in a further twist, having defined ‘top talent’ in such narrow terms, elite firms have in fact helped to create the conditions for inequality and exclusion in the first place!
A business case for inclusion that is based on talent can only be effective if talent is measured and assessed more effectively. Put another way, little will change until firms start challenging the nature and construction of the war for talent – at least in its current, unexamined state. Obviously the problem of a large number of potential candidates remains, but firms would benefit from a deeper examination of what exactly they mean by ‘talent’ and the distinctive qualities that they are seeking in their trainees. As some elite firms have already discovered, there are substantial potential benefits in doing so. Not only would firms stand a chance of recruiting more of ‘the sort of people who might actually benefit [their] business’, but those that get it right could end up with a powerful way of differentiating themselves from their competition. However, firms adopting this approach require the courage to be truly different.
This article is based on a Cass Centre for Professional Service Firms working paper: ‘Exclusive Inclusivity: Securing Status and Legitimacy in the UK’s Elite Professional Service Firms’, by Dr Louise Ashley, University of Kent, and Professor Laura Empson of Cass Business School, City University London.