Bad Money After Good: Preserving Your Employee Investment

by drjim on August 24, 2008

How can you preserve the investment in your IT employees?

How can you preserve the investment in your IT employees?

The great thing about talent portability in today’s IT market is that whenever you have a need to fill a position that requires a specialized set of skills or experiences, you can generally go shopping and find exactly what you need. The downside to this is the simple fact that your competition can do the same thing and they might be selecting from your employees!

Gone are the days in which firms developed their talent from within. Carefully nurturing those-who-would-be managers, giving them the training that they needed and rotating them among job assignments so that they would be ready when the trumpet sounded for them to take center stage in the Colosseum of business. Perhaps somewhat sadly, that model no longer exists.

Instead, today’s IT professionals are free to move on whenever a better opportunity presents itself. Applicant-tracking company Taleo has done a survey in which it was revealed that 80% of firms that participated in the survey have moved away from this “we know whats best for you” model to now starting to use internal job boards that are designed to make it easy for employees to apply for open positions and move around within the firm instead of leaving it. The poster child for this approach is Dow Chemical who was able to cut its turnover rate in half when it moved to using the internal job board approach to fill positions.

A small note of experience is probably due at this point. I’ve worked at a number of large firms in which it was mandatory that all openings were posted on the job board. However, the position was often already effectively filled by the posting manager long before the posting. Once the rest of the firm starts to understand that the job board is basically just window dressing, its value and its ability to retain staff goes down significantly.

What’s interesting about the shift to using a job board approach is that it moves the burden of managing an employee’s career from the company over to the employee. This has, of course, caused a great deal of chaos. The disconnect comes when an IT team member wants to move on to another job opportunity and his/her manager doesn’t want to let them go. Now we’ve got conflict! Welcome to the world of negotiations – somebody needs to be able to step in and find a way to preserve the investment that the company has made in this employee.

Different firms are finding different ways to deal with this issue. McKinsey tries to resolve this type of issue by (of course, it’s McKinsey after all) using rankings: how did the employee rank the job posing opportunity and how has the employee’s team ranked them on the current project that they are working on? If all of this analytical work does not resolve the issue, then the Senior Partner gets brought in to play the role of King Solomon. Before they imploded, Bears Sterns had created an office of mediation which took on the job of working out such differences between employees and their managers when an employee wanted to move on to another internal job.

In the end, the world of employee training and retention has been turned upside down. Where once firms were responsible for training and managing the careers of their employees, now that is no longer the case. Instead, the responsibility for managing one’s career is now the responsibility of each employee and training, which used to be a given, is now viewed in terms of its short term payback to the company. The old system of talent management had been set up along the lines of an engineering system: given a set of inputs, a predictable set of outputs would be produced. Today’s talent management is much more fluid. It is driven more by external market conditions and viewed through operations tools that are better able to adapt to increasing levels of uncertainty. It is possible to manage your pool of talent, you just need to update the tools that you are using to do it with.

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