The European football transfer market set a new spending record last year: teams from the big five European leagues (England, Spain, Germany, France and Italy) invested, in a single summer, more than €3.5 billion in search of their star, €1.0 billion more than just two years earlier. And all indications are that in a few short years this figure will seem small.
The world of football reflects like few others the escalation in the “war for talent,” a term coined more than 30 years ago that’s as relevant now as then. The frenetic, even compulsive search for stars in an ever more competitive market has turned the talent hiring process into a risky activity, and one of the biggest challenges managers face.
Decide whether stars are what you need
So where to begin? Start with a serious think about whether you really need to recruit a star. The signing of stars is generally seen as beneficial to a company: it is common to assume that the new incorporation will inspire and mentor existing employees, and have a multiplier effect in the organization.
But a study by IESE professor Fabrizio Ferraro suggests that may not be true. The cost of hiring heavyweights may not be compensated, and may undermine the performance of existing employees and the company in general, the study found. Instead, cultivating your own talent may provide the clear benefits of lower costs, greater loyalty and a perfect fit.
How to make it work
However, you may be facing a scarcity of internal talent, or need a unique profile, or be setting up a new company, and decide a star is what you need. Here are some tips to make it work:
- Be clear about what you need. According to a study conducted by the Society for Human Resources Management, hiring the wrong person can cost up to five times their annual salary. Planning is essential to avoid errors. Determine exactly who you want to hire and what functions they will perform. To this end, it’s useful to write a list of the desired qualities, experience and values; then reduce it to three or four essential items. These points will serve as essential guidelines in choosing a candidate without losing sight of the desired profile.
- Replicate your talent. On setting out to sign a star, many companies ignore a fundamental issue: often, star performance is intrinsically linked to their company. Professor Ferraro’s study shows that a change of airs can be counterproductive for the new employee. Identifying the best qualities in your most talented employees and searching for similar candidates helps significantly reduce the risk of this happening. The companies with greatest success in hiring stars usually search for talent in companies with similar characteristics.
- Involve your team. If two employees are going to share an office, make sure that there is a certain chemistry between them. Otherwise, a train crash could end up in a resignation letter on the table or have devastating consequences for the team. Involving your team boosts their morale while allowing you to foresee and avoid tense situations. The hiring decision is down to the boss, but being a boss is also about listening.
- Settle your star in. The success of a new hire is not complete until the new employee has adapted to the company. It is as bad an idea to leave them alone with their responsibilities as to micro-manage their work. So as not to rapidly burn out a new incorporation, it’s important to design an onboarding strategy so that they can assume their responsibilities at the right pace.
- The employee experience, a strategic priority. Making the company be valued by its employees should be the highest aspiration of any company that wants to attract and retain talent. We’re not talking about installing a ping-pong table in the break room, but about employee experience, an essential HR management model for competing in the current business world. In a study conducted by Jacob Morgan, author of The Future of Work (Wiley, 2014), companies that designed and implemented a clear employee experience strategy achieved average profits four times greater than those of other companies.
Recruiting and retaining talent is an essential part of leadership. IESE delivers a wide range of general management programs to strengthen your leadership, along with shorter, more specialized courses to hone a particular skill. Wherever you are in your career, our portfolio of executive education programs will have something to offer.