What if Your Talent Walked?

Posted on December 15, 2010

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Google announced this week that they were increasing every employee’s paycheck by 10%, effective immediately. Their generosity appears to have been stimulated by rival Facebook’s focused efforts to poach Google employees. After surveying their employees, Google determined that base pay was the single biggest influencing factor affecting an employee’s decision to stay, so the company proactively responded with a generous pay increase.

Google appears to have embraced the corporate maxim that “People are our greatest asset” because, in Google’s case, they are. And Google is not alone in feeling vulnerable to the loss of talent. A large fund manager last week, Gartmore, also fell victim to the exodus of talent when they lost a key fund manager, followed by several colleagues, that threw the firm into chaos and nearly destroyed its value.

The lessons learned from these companies is that your greatest assets may not be your physical plant, machines and inventory, but your talent that drives your company’s innovation and growth. Losing these key people is the equivalent of having your assets stripped from your company.

The critical talent within an organization does not necessarily reside at the top. Perhaps it’s the software engineer who has written all of the code in the machines that you build. Perhaps it’s the salesperson with the long and close relationship with your biggest clients. Or perhaps it’s the designer who created the distinctive and unique user experiences that propelled your growth.

It’s essential that management understand the true value of their talent, which may not be reflected in the size of the paycheck, but in the size of their contribution. Once the company’s key contributors are identified, the company should take steps to implement a contingency plan should they lose a key individual and plan to mitigate the damage of their departure.

No engineer or software developer should be able to keep all their drawings and code to themselves. Their work should be kept on an accessible drive and they should be required to show at least one other employee how they produced their work and to share their intellectual property.

Likewise, no single salesperson should have exclusive access to a company’s clients. Senior executives need to be engaged with those clients who are most important to the company so the departure of a single rep doesn’t cripple the firm.

Hedging against the risk posed to the business by the departure of human capital should be a priority for every executive team, especially where knowledge and relationships are the firm’s major source of competitive advantage. In these situations, the loss of key people could mean the loss of the entire business, and it’s up to the CEO to manage their most precious assets like they mean it.

 

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Posted in: Hiring