Outlaw eReport

TALENT WARS

It seems like every publication you pick up has observations, information, or advice on getting and keeping top employees. The March special double issue of Selling Power leads with, "How to Be the Best: Hiring Practices that Attract Great Salespeople." Sales and Marketing Management featured on the cover of the March issue, "Winning the Recruiting War". Business 2.0 March issue touts "The Ten Driving Principles of New Economy" and listed people as the fourth of ten driving principles. This principle says, "they are the crown jewels... and they know it". Brainpower can't be tallied on a ledger sheet, but it is the prime factor driving the new economy.

Harvard Business Review has jumped on the bandwagon and features "A Market-Driven Approach to Retaining Talent" in the January - February edition. The September and October edition featured "Job Sculpting, the Art of Retaining Your Best People." Everyone is looking for a unique and innovative approach that will automatically solve their problem, in short, a silver bullet. There are no silver bullets to retain people and more and more, employees realize they are in the driver's seat.

The April issue of Smart Money magazine touts on the cover, "Same Job, Better Perks: How to Bleed Your Boss for More." It is apparent that the talent wars in all organizations, not just high-tech ones, has heated up. The response that many have taken is to simply increase the compensation. Unfortunately, this approach has tremendous pitfalls.

If you use the "marketplace philosophy" and determine what it takes to set salaries for new employees, you are faced with a dilemma. Increase everyone else's pay, impact profits, and possibly upset the whole financial structure of the organization, or have multiple salary structures that raises pay to attract a new employee while leaving loyal, productive, existing workers at the same rate. Many have taken the latter approach, and it has backfired.

Remember, there are no real secrets. Our evening news proves that every night.

Salaries and compensation today have become a taboo subject and companies like it that way. Many people would rather give intimate details of their personal life than to tell the size of their paychecks.

Even with this resistance to share compensation information openly and policies against it, leaks do occur. When they do, the results can be disastrous. For example, Agency.com inadvertently posted a salary spreadsheet on its New York location staff e-mail last September. The file was intended to inform employees of vacation days, but instead contained compensation figures. The employees saw compensation of 250 out of 1200 employees. What was most upsetting to employees were the large differences in salaries within job categories. In some positions the range was from $65,000 to $123,000 while others were not as dramatic at $65,000 to $107,000. Employees who thought they were on par with colleagues were necessarily perturbed when they discovered they made less.

The fallout from this mistake was disastrous. Even though management
tried to explain the reason for the inequities, which in many cases were
based on when the individual was hired, it caused a great deal of dissention and many quit to go elsewhere. Within a few months after the salary spreadsheet was posted there was a staff turnover of more than 20 percent.

We all understand that talent is in short supply and workers are becoming more aggressive about demanding benefits. But what can be done to avoid everyday problems and even a disaster such as the one that occurred at Agency.com? There is no one answer or silver bullet. It is a combined approach of five logical and considered steps.

1. CREATE A POSITIVE WORK CLIMATE. Make sure employees know they will be treated fairly and honestly. Open communication, even about sensitive subjects such as salary, must occur. This is not to say that everyone's compensation becomes public knowledge. It does mean that there are no embarrassing secrets that, if revealed, could damage loyalty and make the employee feel less valuable. Remember; people work for more than money. If you want to get out of the bidding war, you have to make the job more valuable than the paycheck.

2. DESIGN THE JOB TO BE FULFILLING AND REWARDING. Not enough attention is paid to creating a job with the duties, responsibilities, expected level of performance, and career progression that employees want to go to every day. Be sure the job, as it's designed, can be done. Don't have responsibilities work against each other and limit the individual's success. Know clearly what is to be accomplished and communicate it to the individual.

3. MATCH THE PERSON TO THE POSITION. Even if you have crafted a challenging, rewarding, and fulfilling position, make sure the right
individual is placed in it. Be sure their behavior, skills, and values match the position. Many fail because the needs of the position don't match their capability.

4. RECOGNIZE AND REWARD PERFORMANCE. When the individual meets or exceeds the expected level of performance he or she should be rewarded. Design a system of rewards that includes not just salary and benefits, but also includes performance incentives since they allow the earnings to reflect the individual's true contribution. Don't forget to recognize and reward performance in ways other than compensation. Recognition programs, true appreciation, and "positive strokes" go a long way. Even in our new economy people work for more than money.

5. BUILD IN CAREER GROWTH. Understand the individual's goals and
objectives as well as or better than they understand them. Provide the
opportunity to reach them. If employees are constantly challenged and
moving toward their goals, they will be less likely to look outside to
satisfy their need for self-actualization.

The current shortage of talented, motivated workers will continue. With
the declining birth rates of eighteen to thirty years ago and the continued expansion of our economy, the shortage will continue. Companies, that will be positioned to take advantage of our new economy, will be those that will pay particular attention to the fourth of the ten driving principles according to Business 2.0.

"People--they are the crown jewels...and they know it. They will be
attracted to and stay with organizations that not only create value for
their customer but create value for their employees."

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