Modern days wars, there are two ongoing conflicts that are lasting for decades: the Korean war and… Talent Wars! Both are going on as long as we can remember, and are probably equally far from any solution. The High Impact HR Professional should be one step ahead to avoid falling in any talent guerilla trap!
The war for talent came from a 1997 McKinsey study and is real until today – and as one could expect, market forces are bringing talent prices up – mainly at talent intensive companies, such as banks and consultancies, but also in some specialist roles (such as oil and gas). Link for the book: http://books.google.com.br/books/about/The_war_for_talent.html?id=simZCd_YUC4C&redir_esc=y
McKinsey revisited its studies and forecasted another talent shortage in whole world (either in mature or emerging markets, we will be faced with some shortage). Find the link for a good summary here: http://www.mckinsey.com/insights/economic_studies/talent_tensions_ahead_a_ceo_briefing
But “talent wars” were made to be fought between companies – markets are driving prices up as expected, with graduate professionals being paid a premium in emerging markets (prices for a MBA graduate ins 25% higher in South America, Middle East and Asia than in Europe or US – according to LBS 2012 MBA career report, the median annual compensation (salary + bonus) for a graduate who chose to work in Latin America was about $162,000 – 25% higher than the compensation level in the US or the UK (whose median annual compensation was respectively $132,000 and $131,000).
So, the obvious reaction is to raise prices to compete – go nuclear, and we get in (reverse!) price wars, and soon the whole world will be overpaying for talent!
High impact HR professionals thinks differently.
They think on how the organization can profit from all the talent mayhem.
They think on how they can operate at maximum efficiency such as:
Arbitrage: we can try to find talent in markets in which there is a surplus of Talent. For example, in Brazil, looking for “cheap” talent in Argentina, Portugal and Spain is great!
Smart turnover: HR generally focus on general turnover – but little is made to qualify: are we losing the best? Our talent? Or the professionals that we want to lose? Also, is this turnover “smart” (it means: do I really need to fire these professionals, or what I can find in the market is marginally better – therefore incurring in unnecessary costs?)
Develop your own talent: sometimes better talent is only a matter of better leadership. By refreshing your leadership rows, you can possibly unlock the performance of people that was under-stretched. Always think about investing in good leaders, before investing in overall HR expenses!
(Hey, High Impact Professional, can you share any other strategy besides overpaying?)
But are talent really that relevant, in order to overpay that much for them? Take into account the best soprano in the world – he is making millions, while the 2nd best is struggling to get by – and worse: let’s take into account their “performance”: the difference is probably marginal, however we pay a lot more for the first!
The question is: is the world going to fall if we let the 1st one go, and keep the 2nd best?
So, we are in the middle of the talent wars, and we got so afraid of it that we are being held hostages by our own talent – and risking overpaying for marginal performance gains!
(getting further: companies are so self-centered that sometimes overpay for someone who they think it is a talent, but is only a regular performance in the market)
The evil side of that: companies generally pay according to what market pays – so you get in an upward compensation spiral: you pay more, therefore the market pay more, and than you have to pay more, and so on.
We can’t let the market drive us! We have to lead the market!
It takes guts. Sometimes you must be willing to keep prices down, even risking to lose talent. Of course you get exposed. Of course no one wants to lose the best. But sometimes it is worth to. As a statement. You may increase your risks to tame the market, for not getting into a Talent Nuclear War.
However, High Impact HR Professionals get in the battlefield to win.
We are in the middle of the war, but we won’t be the first to fall.
If we fall, we will fall shooting!
HIGH IMPACT HR PROFESSIONALS WORK HARD TO BEAT THE MARKET. And must work tireless for that!
Best
Alex
photo credit: funadium via photopin cc
