More than 50 venture capitalists—including world-famous Sequoia Capital
—attended the conference, firmly establishing RDU as a must-visit region on VC scouting tours.
With record attendance, the energy fueling the conference was palpable. Sponsors and presenters came from a wide range of companies such as Cisco, Fidelity, BlueCross BlueShield, Avalara and Citrix, underscoring the role established firms play in helping build new ones. And it was all to bolster our region’s credentials as a leading innovation and entrepreneurial center.
I attended hoping the speakers would regale me with their tales from the front lines. I did manage to catch a few good stories. But beyond the pitch decks, deal-making and atta-boys, what I heard and saw made me nervous, even fearful that all these entrepreneurial dreams would be hampered and hindered by failing in one critical area. That’s talent management. This is the alarm officially sounding. There are tremendous economic opportunities before us, but can companies take advantage of them?
Enlightened Companies are Leading the Way in Managing Talent
The good news is that enlightened companies like Cisco and Bandwidth are on top of their game when it comes to managing talent. Once a start-up, Cisco is now a global publicly-held company that must innovate to ensure long-term survival. When Senior Vice President Rebecca Jacoby talked about her company’s innovation platform, “people” was a central component. She discussed how companies will attract and manage the talent of the future.
“The first thing that really attracts people right off the bat is when you have a higher purpose in your business that they can relate to,” she said. “But in the end what we have to produce for the company is an adaptive workforce. That adaptive workforce is essential for the future because the technology is going to continue to change at a pace that we have to be able to keep up with.”
Having an adaptive workforce requires new thinking from employers about their people, work arrangements and teams. For some firms, this is where it’s gonna get scary. The workplace itself will undergo great disruption. These highly skilled employees will command premium wages and will be heavily recruited to competing firms or different firms promising better work. Many will operate like hired guns following the work and the money. Others will leave blue-ribbon jobs to take personal risks to create new technologies or build their own companies. What will firms do with their workers that are less mobile?
In a different presentation, Bandwidth CEO David Morken was similar-minded. He too was concerned about sustaining good talent over the long haul. He admonished the audience to “think big about inside your company.” Morken then proclaimed what he calls his company’s “whole person promise,” Bandwidth’s talent philosophy that emphasizes building an employee’s body, mind and spirit.
“That means you are not coming here (to Bandwidth) to burn yourself out and crater,” he said. “We believe in work-life boundaries and we put them in place for you.”
The company requires employees to take all of their vacation, enforces no meeting rules during lunch time (usually reserved for exercise) and offers on-site chaplains to meet spiritual and personal needs. Long hours are not rewarded—the boundaries are firm.
“I need creative people,” Morken said. It seems to be working as the company has secured critical patents on its path to growth—a telltale sign of innovation.
Finding the Right People is Not Easy for Any Size Company
The bad news is that finding and keeping the right people is not always easy. Windsor Circle co-founder Brad McGinity used the CED stage to ask for help filling key positions. He touted the 70-person company’s Glassdoor status as the “top ranked” employer in RDU. Despite free green pants and equity ownership for everyone, the fact remains that he has difficulty filling critical roles.
While firms are figuring out the changing talent landscape, longstanding issues like gender bias still prevent them getting the most out of the marketplace. When pressed by questioners, including N.C. Treasurer Janet Cowell, about diversity, Jim Goetz of Sequoia conceded that the gender gap in technology C-suites is embarrassing. Aside from being morally wrong, he said the lack of a feminine perspective at Sequoia could have caused the VC firm to overlook an investment in the unicorn Pinterest, now valued at $11 billion. The firm is actively pursuing a female partner.
Companies on the conference demo floor provided even more evidence of the talent challenge. According to CED’s Joan Seifert-Rose, 26 percent of the 96 presenting companies had at least one woman or ethnic minority on their founding team. “While it’s difficult to know how this percentage stacks up nationally, it’s a sign that at least the door is open to new perspectives and contributors,” she penned recently for Xconomy. The door indeed may be open, but it looks to me like it’s only about a quarter of the way. That keeps a lot of perspectives out of the room.
Even the products promoted by attending companies reflected the talent challenge. Some are taking on recruiting, like LineHire which offers qualified candidates for fixed fees. Another, EmployUs, which calls itself the “Uber of recruiting,” flashed a suitcase full of cash to promote its new recruiting referral product. It rewards people for reviewing jobs and referring them to their friends. They get paid if a friend gets hired. Products from other companies like TaskTorch, All Elements and Trimlio promoted work process improvement, employee engagement and corporate wellness, respectively. All are items on the corporate talent checklist these days.
It’s Not “If” the Talent Crisis Will Affect Your Business, It’s “When” and “How”
At some point, every entrepreneur, every scale-up or “tweener” firm, every mid-size organization and every multinational Fortune 500 concern must meet the challenge of attracting, developing and retaining talent. Those focusing on talent now, like Cisco, Bandwidth and Windsor Circle, hope to gain the edge on innovation, profitability and longevity. For laggard firms and industries just now visible on the horizon, the skilled worker deck is stacked against them. The math simply doesn’t work. The number of students preparing for jobs in STEM-related industries—like most of those at the conference—will not be enough to meet the demand for workers in the future.
This growing industry is on the leading edge of technology and science. While the local talent pool is strong, the report showed that companies are finding it difficult to hire mid-level workers with the right kinds of skills. The most common technical skill they need is software/computer programming. But the Conference Board estimates nationwide there will be three jobs available for every new college graduate from a computer science program in 2016 alone.
Cleantech firms want more than coders too. They also want blended skill sets that integrate technical backgrounds with business, communication and sales and marketing. Where will these people come from?
The looming talent shortage, especially in STEM fields, shouldn’t be news to those tracking workforce trends. Nearly half of U.S. firms say they are struggling to fill job openings in key positions, according to the Duke University/CFO Global Business Outlook survey released earlier this month. Staffing and consulting firms from Kelly to Deloitte have not only decried the talent shortage but also management’s ill-preparedness to meet that challenge. The pressure for growth and innovation is affecting hiring in the Triangle right now as firms fight for the best available talent. Those with deeper pockets and progressive attitudes have the early edge.
Developing and Attracting Talent Is a Team Sport
It doesn’t have to be a zero sum game though. Everybody just needs to be on-board. The Triangle’s reputation has been built largely on a higher education cluster and its ability to provide a steady pipeline of innovative ideas and talent. Though fierce rivals in the sporting realm, faculty and graduates of N.C. State, UNC and Duke are more often collaborators fueling innovation and preparing the next generation of workers. One need not look further than RTI, SAS, Cree, Red Hat and Quintiles. All are complex organizations of global prominence staffed by highly-skilled workers. Add to that list, CED showcase firm Carbon3D, a 3D printing startup that recently emerged from the UNC chemistry labs to snag $100 million investment from Sequoia earlier this year.
Beyond the cleantech cluster, there is a coordinated effort supporting the area’s overall growth and success. Regional leaders working together along with a forward-thinking populace have made the Triangle a compelling place to work, live, play and start a business. There’s the CED, American Underground and HQ Raleigh. The local universities and community colleges including N.C. Central, Meredith, William Peace and Wake Tech are training our workforce. Chambers of Commerce, the Research Triangle Foundation and other economic development partners are working hard to recruit great companies to the state. They even launched an award-winning talent campaign (“Work in the Triangle“) to recruit skilled workers from across the U.S. to meet the needs of relocating firms and the burgeoning life science cluster. Other organizations are at work too, like N.C. New Schools who is helping to reform school districts and bring STEM education and college-level coursework to high school students. But there is much more work to be done to attract and create a workforce that’s ready to work.
The net is this: the talent challenge is real and persistent. It is also complex. Entrepreneurs, policy-makers, business leaders, university faculty and administrators, public educators and community members-at-large all play a critical role in growing the momentum we enjoy today. To attract and grow great talent, our companies, local communities and the state have to rethink what they offer people in terms of a great life and what people have the opportunity to accomplish both personally and professionally. Otherwise they’ll just go somewhere else.