How to recruit and retain entrepreneurial talent

Employers have always valued employees who are curious, quick-to-adapt-to-change problem-solvers. But as digitalisation and globalisation increasingly connect economies and business, demand for entrepreneurial talent is on the rise, too.

New hires who hit the ground running relieve managers and executives under pressure to deliver better returns on investment, develop new revenue streams, and look out for industry disruptors, said Patrick Blakeney, associate director at Michael Page, a UK-based professional recruitment firm.

Automation helps, particularly in finance, Blakeney said, but “more than ever before, entrepreneurial talent is integral to every business”.

Recruitment and retention of these potential high-flyers can be difficult, though.

In some places they are harder to find than in others, according to the Global Talent Competitiveness Index (GTCI), an annual report published by the international business school INSEAD. (See the global outlook below.)

In some countries, cultural norms and expectations promote deference to authority and status quo, which may make hiring of entrepreneurial talent more difficult than in cultures that highlight new ideas, said Blakeney. “You can’t use a cookie-cutter recruitment approach. You have to adjust to what the culture is.”

Also, retention can be a challenge, because entrepreneurial employees are ambitious and may be looking to move on quickly once they solve a problem, he added.

How to recruit and retain entrepreneurial talent

How can organisations make sure the best entrepreneurial talent comes to them and stays with them?

Recruitment questions are important to zero in on entrepreneurial talent. Blakeney suggested asking job candidates for their track record and to have them quantify their accomplishments. To retain entrepreneurial talent, he recommended engaging an employee in an open conversation about what he or she would like to do next and to be honest about whether you can deliver on what they want.

“Recognition is the most important way to retain people,” he said.

According to a 2015 Deloitte white paper, encouraging entrepreneurship within a business requires a change from the traditional management approach.

The shift encompasses seven steps:

Support. A culture of openness fosters entrepreneurial behaviour because employees are not afraid to share ideas. Each employee should be encouraged to come up with new ideas, and managers need to provide the resources to implement them.

Autonomy and responsibility. Managers need to encourage employees to think independently to tackle challenges. Established command lines, control mechanisms, and bureaucracy should make room for new processes

Motivation and incentives. Financial rewards for entrepreneurial performance are important, but managers must also tolerate mistakes and failures to continue to encourage employees in their entrepreneurial endeavours.

Compensation. Compensation packages should include long-term and short-term goals aligned with the company’s strategy and encourage risk-taking.

Resources. Employees need time to come up with innovations and need resources, including capital, machinery, and experts, to validate them.

Communication. It is up to managers to ensure an open exchange of ideas is possible. Employees should have access to external experts and tools such as idea exchange platforms. Challenges are useful to trigger new ideas.

Structure and processes. Entrepreneurial companies tend to have a decentralised structure. That means managers delegate decisions to the employees with the most knowledge. Collaboration and cross-functional projects broaden and deepen the knowledge base companywide.

The global outlook

The GTCI analyses countries based on whether they attract and nurture talent, and how this translates into a workforce with the requisite skills. The index for 2019 ranks 125 countries, representing nearly 98% of the world’s GDP and 93% of its population.

High-income countries dominate the upper rankings overall. Among the top 50, upper-middle-income contenders are Malaysia (27th), Costa Rica (34th), Azerbaijan (43rd), China (45th), Mauritius (47th), and Russia (49th). The Philippines (58th) is the highest-ranking lower-middle-income country, and Rwanda (73rd) is the highest-ranking low-income country.

The ten countries ranked highest for talent competitiveness in 2019 are:

1. Switzerland
2. Singapore
3. US
4. Norway
5. Denmark
6. Finland
7. Sweden
8. Netherlands
9. UK
10. Luxembourg

These high-income nations are succeeding in creating effective ecosystems for entrepreneurial talent, which is helping them broaden their overall talent edge, according to the report. Upper- and lower-middle-income countries, however, have fallen behind in the past six years.

The 2019 GTCI report also found that cities are emerging as entrepreneurial talent hubs. As hives of activity and experimentation, each with a large customer base to try out new ideas, cities continue to grow in importance on the local and global talent scenes.

The highest-ranked cities on the 2019 GTCI are:

1. Washington
2. Copenhagen
3. Oslo
4. Vienna
5. Zurich
6. Boston
7. Helsinki
8. New York
9. Paris
10. Seoul

— Shilpa Pai Mizar is a freelance writer based in the UK. Sabine Vollmer is an FM magazine senior editor. To comment on this article or to suggest an idea for another article, contact her at Sabine.Vollmer@aicpa-cima.com.