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Methods to Address the Middle Market Talent Gap

June 7, 2016


A Pervasive Middle-Market Concern

CEOs of middle-market companies are increasingly concerned about the lack of human capital—otherwise known as the talent gap—which hinders these companies from attaining their goals and growth plans. The result is often accepting mediocre talent as an acceptable standard.


Middle-market CEOs simply cannot find enough prospective employees with the skills necessary to maximize company growth. Finding the top talent that will enable the company to excel is even more challenging.

Consider the numbers from recent Middle Market Indicator data from The National Center for The Middle Market:

  • 31% of middle-market executives find it extremely difficult to attract people for top-level management positions.

  • 51% of middle-market executives believe they do not have enough qualified people to fill key leadership positions.

  • 77% of middle-market executives consider the ability to attract, train, and keep talent very challenging.

Talent Gap Sharply Affects Mid-Markets


The talent gap is acute for middle-market businesses for many reasons:

  • Baby boomers operate most middle-market companies, and these “boomers” will continue to retire in droves.

  • Middle-market CEOs compete with smaller and startup firms, which possess high levels of excitement and energy.

  • Middle markets struggle to match the compensation packages—salary, bonuses, stock options, health care benefits, retirement packages, etc.—offered by larger companies.

  • Many middle-market companies are located in smaller towns or less popular locations, which handicap their pursuit of talent from more desirable locations.

Combat The Talent Gap with The Strengths of Mid Markets


The challenges listed above are a few of the large roadblocks middle-market companies face. Yet, not all is doom and gloom.


The size of a company correlates with certain inherent strengths and weaknesses. Middle markets offer advantages that larger companies, by their nature cannot offer, including:

  • Less bureaucracy

  • More opportunity to work with executive management

  • A shorter path to the top

  • Stronger connections to the community

  • Ability to more directly impact an organization’s results

The most successful mid-market companies leverage these advantages to attract and keep great talent.


Additional, Creative Methods to Bridge the Talent Gap


CEOs can also attract talent if they are willing to:

  • Target acquisitions of smaller peers in the same industry to bring on senior officers and middle managers to help growth. This strategy—known as acqui-hire—is a creative option for middle markets.

  • Look to expand business in talent-rich markets, as well as explore alternative work flexibility such as virtual offices.

  • Create a unique employer brand to help provide middle-market firms an edge.

  • Create strong employee value propositions. Middle-market firms with a strong employer brand as well as a strong “employee value proposition” are more likely to report higher employment growth than firms with less-established brands.

  • Establish opportunities for growth, work/life balance, and promotion.

  • Bring in a short-term interim leadership team to identify, hire, and train long-term talent. This team creates process, policies, and procedures, and can assist in the training of permanent team to perform at a high level, quickly.

  • Provide employees a participatory role in decision making, so they feel feel they belong, and in turn, commit to the company.

  • Give employees more autonomy over their roles, and allow them to complete tasks in a way that suits them.

The Talent Gap and The Immediate Future


A 2016 Deloitte survey America’s Economic Engine: Tapping The Brakes, reports middle-market companies and other businesses do not feel great about the 2016 economy and business prospects.


Almost one-third of mid-market respondents do not expect the U.S. economy to grow more than two percent over the next twelve months, which tempers firms’ prospects.


“Despite these concerns, one area where we are seeing mid-market executives adopting a long-term view is in training and development of talent,” said Roger Nanney, vice chairman of Deloitte LLP, and national managing partner of Deloitte Growth Enterprise Services. “Prioritization of investments in talent and building a diverse workforce will alter the landscape of the middle market in the coming year and could set these executives up for growth with a robust talent pipeline.”


In fact, 56% of companies report their workforces grew over the past twelve months. While the results are in line with a U.S. labor market that is expanding steadily, nearly two-thirds agree that it is more difficult to find skilled talent to meet their business needs. More than half of respondents say training will dominate their talent investments in the coming year.


So, the search for talent continues. If mid-market companies think creatively and use their size advantages to remain flexible and nimble enough to provide the right mix of benefits and attractions, they can eventually bridge the talent gap.



Image Credit: Shutterstock

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