Employers have been staffing up like crazy in areas where there are
market opportunities, but they have been staffing down just as fast in
areas where market opportunities have disappeared. The reality of the
new economy is that there is tons of work to be done, but no real job
security for anybody. And it is that reality that gave birth to the
free agent mindset and, thus, the talent wars.
And that’s the beauty of the increasingly efficient free market for
talent: Nobody’s going to sit around wallowing in an economic
downturn. Individuals are going to find ways to fend for
themselves--learn new skills, find new jobs, work harder, faster, and
better. And organizations are going to be flexible enough to find new
efficiencies, get even better at employing people, continue to improve
productivity, and reap new profits.
RainmakerThinking is proud to present edited excerpts from Bruce
Tulgan’s new book, Winning the Talent Wars
(coming January 22, 2001 from W.W. Norton).
The desperate financial bidding for talent has been the most vivid in
professional services firms, as well as in the high-tech sector. And
it has, of late, been creeping into pay schemes from the management
level all the way down the line in organizations unwilling to let go
of the old-fashioned career path. Of course, the executives at these
firms are attempting to keep the best people on the old-fashioned "up
or out" path until those executives decide whether or not they want
each person to stay or go. In pursuing this strategy, however, these
firms have (purportedly) locked themselves into very expensive
long-term deals.
Having followed this approach, imagine the feelings of business leaders
whenever the markets manifest their wild gyrations. When the market
plummets, they might be thinking, "Oh no... We’ve just raised salaries
and benefits dramatically. Now we are going to be so financially
over-committed we won’t know what to do." But of course they are not.
Instead they are thinking, "Hmmm... We may have to get rid of a bunch
of employees and draw back those pay raises." That’s because bidding
up pay in the context of long-term employment relationships is at best
a pretend game and at worst a foolish business error. Staffing levels
and pay must be as flexible as the market is fast.
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