The talent wars cannot be won by out-bidding other employers. Business
leaders who try this strategy will win a few battles, but they are
destined to lose the war because their long-term employment model
makes them sluggish. Routinely, they will find themselves bloated
when they need to be lean; and too lean when they need more people.
Instead of figuring out how to operate successfully in an increasingly
fluid labor market, they are trying to hold back the tide with money.
By bidding against their employee’s competing career options, such
business leaders are missing the point. The real problem most
employers face in retaining their best talent is that they offer a
rigid one-size-fits-all long-term career path. It is this anachronism
that their talent is fleeing. Instead of thinking about changing their
approach to employing people, these employers have decided to pay
through the nose so they can employ people the same way they always
have. The problem is, with so many employers engaged not just in
retention efforts, but also in massive recruiting efforts, the
retention bidding wars turn into recruiting bidding wars. It’s a
vicious cycle, driving up the cost for these organizations of
employing the best people, without increasing retention very much at
all.
Effective employers in the new economy are avoiding wage pressure by
employing people in sync with the fluid market. They employ people
only when they are needed and pay them what they are worth on the
market one day at a time, rather than trying to make long-term
employment and pay deals that are insulated from market forces.
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