More than one-third (36 percent) of employers globally reported talent shortages in 2014—the highest number in seven years—according to ManpowerGroup’s Annual Talent Shortage Survey, 2014. In the U.S., the percentage jumps to 40 percent. Yet millions of people nationally are unemployed.
How is it possible that nearly half of our nation’s employers are struggling to find the talent they need? According to ManpowerGroup, the top reason employers gave for their difficulty in filling jobs was a lack of technical competencies.
Ten years ago, State Street was struggling with this exact problem. We needed a strong pool of skilled and diverse talent to fill entry-level positions. We also needed to reduce turnover and increase engagement. So we set out to tackle these issues head on, and we did it in a way that also benefits our greater community. It’s truly a win-win.
Teaming Up with Year Up
In 2005, we turned to Year Up (http://www.yearup.org/), a nonprofit that provides job training to unemployed young adults—taking them from “poverty to professional careers in a single year.” Our State Street Foundation already had been supporting the organization, and we saw an opportunity to evolve this philanthropic effort into a business strategy.
In the past, we averaged 80 Year Up students annually for six-month internships, in hopes of turning them into full-time employees. In 2015, we increased those internships by 50 percent. For our 2007 class—the first year we have data for—we had 62 percent convert to full-time employees. Of individuals hired within the last five years, 82 percent are still employed with us today.
The success of our partnership depends on the commitment of both sides. Year Up makes sure students are ready to enter the workforce by giving them the technical and soft skills training they need. Meanwhile, our business unit leaders align their talent acquisition strategy with Year Up’s program schedule.
And the numbers speak for themselves. In addition to filling 50 to 60 entry-level positions in IT and investment operations annually with Year Up graduates, we have lower turnover. We’ve seen 10 to 20 percent better retention rates for the roles that Year Up graduates take on full time, compared to those filled by traditional recruitment measures.
Building a Partnership, Filling Your Talent Pool
Tapping into non-traditional pipelines of talent has given us access to diverse candidates with the necessary skills to add value to the organization. Here are keys to making your effort successful:
- Assess your situation. Have a good understanding of your organization’s entry-level roles and where the gaps are, and determine the level of training and education required to fill them. Does the job require a four-year college degree, or would targeted post-secondary skills training lead to better results?
- Find the right nonprofit partner. Identify and vet an organization that can meet your talent training needs. There are resources available, such as Grads of Life (http://www.gradsoflife.org), to help you find proven training programs like Year Up.
- Stay focused. Remember that this partnership is a business strategy and investment—not philanthropy. You must approach it, and fund it, appropriately.
- Make the most of the partnership. In addition to internships, consider programs such as mentorships that provide an opportunity for the entire organization to get involved. Work with your partner nonprofit to make sure its training curricula are meeting your hiring needs. And coach your managers—or ask your partner to help you—on how to support interns and new hires to help them succeed.
- Measure outcomes. Know how the program is doing and take accountability if the partnership isn’t meeting your expectations. Are you providing enough career development support? Do you provide a culture of inclusivity? For example, at State Street, we supported Year Up graduates who established an affinity group for Year Up interns and hires at the company.
The Bottom Line
Our partnership with Year Up simply makes good business sense. We’re increasing our ability to fill entry-level positions, and increasing retention and engagement—all while contributing to the economic well-being of our communities. We’re also decreasing hiring risks for these roles, because our managers can assess students’ performance during their six-month internships before deciding whether to hire them full time.
We encourage other companies to work with Grads of Life to connect with a nonprofit that meets your specific needs. You’ll have access to skilled, motivated employees and help young adults secure full-time employment.
The results don’t come without a significant investment of time, money, and effort. And you must continuously evaluate and improve your approach to make sure the program aligns with your business strategy. But when you’re successful, your return on investment is tremendous.
Michael Scannell is the head of Corporate Citizenship, Talent Acquisition, and Global Inclusion at State Street, which provides financial services to institutional investors around the world.
