Crafting New Talent Pipelines for Gen Z

Distributors would do well to implement several new practices and methods, such as modernizing titles, implementing effective internships and defining career paths, according to Bharani Nagarathnam, associate director and master of the Industrial Distribution Program for Texas A&M University.

In general, the Gen-Z demographic has a different mindset when it comes to seeking and keeping jobs. Nagarathnam will speak about how distributors can take this mindset into account as they build their next generation talent pipelines during MDM’s Future of Distribution Summit virtual conference on April 13.

Nagarathnam says the Industrial Distribution Program at Texas A&M graduates about 300 to 350 students each year. “Our students go into many sectors, but mostly distribution. If you take a 20-year-old, or a 21-year-old, job titles mean something to them. They may not mean a whole lot to me, but saying, ‘I’m an inside sales rep with a distributor’ is not very appealing or sexy to them.”

Re-thinking job titles in a manner that is more appealing to Gen-Z prospects should be coupled with defined career paths for prospective employees. Nagarathnam says the old-school approach of “work hard and good things will happen” doesn’t resonate with Gen Z. They want to know that a job is providing them a defined career path with attainable goals in place. Defining the steps of a career path helps prospective employees envision where they might be with a company five years down the road.

“We have seen companies, when they come to recruit, showcase their career paths,” Nagarathnam says. “That immediately opens the eyes of young people.”

While the pandemic has made it slightly worse, Nagarathnam says finding entry-level talent has been an ongoing challenge for some time because distributors compete with other industry verticals, such as manufacturing, for talent.

“Companies are saying it is hard to find good talent. That’s No. 1,” Nagarathnam says. “And No. 2, it’s hard to keep good talent, especially in the first five years, and especially in distribution. We see that there are certain roles that have a very high turnover rate. Warehouse associates and drivers are in high demand and some companies have high turnover rates.

“All of the distributors are looking for good sales professionals, both entry-level sales professionals and experienced sales professionals. We see that as a challenge that’s been slowly growing, and now it has reached a point where if you don’t have a clear plan and a differentiated approach to building a talent pipeline, then it’s going to be hard to staff your needs.”

Talent recruiting is everyone’s job

Just as customer service and safety are everyone’s job, talent acquisition is not just the job of HR. Nagarathnam says HR departments play a key role in setting up career fairs and making sure people go through the correct steps en route to being hired, but leadership needs to be out front by engaging with Gen-Z prospects.

“Talent acquisition and talent development is every manager and every leader’s job,” he says. “If you say that it’s HR’s job to staff my needs, then the organization is not going to be very satisfied.

“Putting together talent acquisition strategies and processes and getting involved in recruitment is a very important job responsibility for every manager. It could be a branch manager, or it could be a leader in another area.”

Craft an employee value proposition plan

Nagarathnam also plans to speak about the importance of distributors creating an employee value proposition (EVP) plan during his April 13 presentation. An EVP plan outlines why Gen-Z candidates should come work for a distributor, beyond providing them with salaries. With Gen Z going to companies’ websites or LinkedIn to view available opportunities, Nagarathnam says distributors might consider looking beyond just providing job titles and descriptions as part of their EVP plans.

“It involves highlighting your employee value proposition,” he says. “It’s things like your culture. Your work environment. The growth opportunities and the team environment. You should showcase and highlight that, especially on LinkedIn, but on other platforms as well.

“What you’re doing is you’re opening a window for future employees to look inside your company. Of course, whenever you have a job opening you post that [information], but are you highlighting your employees? Are you showcasing your employee development activities and your community activities? All of those things are what we call the employee value proposition.”

In addition to LinkedIn, Gen-Z candidates will also check out a company’s culture by looking at reviews and comments on employment sites such as Glassdoor and Indeed.

“People go and write bad reviews, mostly about their managers,” he says. “Before anybody thinks of applying to your job, they check out your website. They check out your LinkedIn and other social media. Having a plan for a digital recruiting is very important.”

Nagarathnam says he’s starting to see some companies engage in passive recruitment of Gen-Z employees by engaging with them on LinkedIn and other social media sites even before they have job openings for them.

“You are connecting with them on LinkedIn and they begin to see information about your company,” he says. “You’re engaging with them and then two, three years down the line, you’re hoping that they see you as a good fit. When the time comes, they apply to your company.”

Designing project-based internships

Another way of building a sustainable talent pipeline is through internships. Internships shouldn’t be viewed as free labor in the short term, but rather an opportunity for the interns and the employers to kick the tires on full-time jobs once the internships end.

“An internship is a much cheaper and more effective way to build a sustainable pipeline for entry-level positions,” Nagarathnam says. “The reason that I say that is if you don’t have an internship program, and if you recruit for entry-level positions and invest in the individual, for one year, 18 months, or two years, and they leave, you have spent upward of $100,000 and lost an employee.”

The key to successful internship programs is a “try before you buy approach” for both sides. Employers are evaluating the students on whether or not they have a good work ethic and the skills needed to succeed in their companies. The students are evaluating the employers to see if they’re a good cultural fit and working environment for them.

“You have two advantages,” Nagarathnam says. “No. 1 is you have pre-boarded them already, which means their onboarding and getting to productivity is going to be much faster. And No. 2, you’re going to be able to retain them much longer because they have tested out your company and they decided to come work for you.”

Project-based internship programs help distributors build sustainable talent pipelines, and company managers are key to those programs.

“Do you know what happens when students have a good internship experience? They go and tell all of their friends about it. Do you know what happens when they have a bad experience? They tell a lot more people about it,” Nagarathnam says. “Don’t use the interns as help. Use them on a project to provide them with experience in the hopes that you can convert some of them to an entry-level employee.”

Due to promoting from within, distributors need to open up their talent pipelines in order to continually fill in the gaps for entry-level positions.

“No one small thing is going to make a significant difference, but a small improvement in many of these areas is going to create a difference in your talent acquisition practices,” Nagarathnam says. “My message to [distributors] is, you are competing with everybody for talent. You’re competing with everybody to recruit that person.

“It is time that distributors re-think and modernize their practices. In the long term, that’s going to yield dividends. The speed at which they can grow is only dependent on their people. Focusing on getting people is going to help them achieve their business plans.”