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The Imaginary War for Talent

An organization's difficulty in recruiting and retaining top talent may be due to its corporate culture, its absurd job requirements or its faulty recruiting procedures. But it's probably not due to a lack of talent available on the job market.

Monday, April 2, 2012
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Much is currently being made in the media of the "war for talent", particularly in technical fields. Everyone from high-tech start-ups to industrial giants is supposedly suffering from a dire shortage of technical talent and is going to extremes to lure talented candidates.

However, evidence on the ground of this supposed "war" is scant. If your organization is feeling a talent shortage, that may reveal more about your organization than about the current labor market for skills.

I recently visited a small market-research firm. It was located in a run-down building in a grimy industrial park. Most of the space was devoted to dozens of telemarketers talking simultaneously on the phone. When I asked the firm's manager about her technical talent needs, she casually mentioned that she had on hand a full team of statisticians, all with Ph.D.s.

We hear so much about the "war for talent" across the media, from NPR and The New York Times to The Economist. Yet, how is it that glamorous Silicon Valley start-ups on the cutting edge of data mining claim they can't find the technical talent they need, while the manager of a local market-research firm has secured an entire team of Ph.D.-level statisticians?

Perhaps her statisticians are of inferior quality? There is a perennial debate as to whether sustainable business success comes from extraordinary talent, or from more mundane factors such as cooperation, teamwork, motivation, and good team management.

Mark Zuckerberg, founder and CEO of Facebook, said, "Someone who is exceptional in their role is not just a little better than someone who is pretty good. They are 100 times better."

Marc Andreessen, co-founder of Netscape and now a well-known venture capitalist in Silicon Valley, expressed a similar notion: "Five great programmers can completely outperform 1,000 mediocre programmers."

Meanwhile, Bill Taylor, co-founder of Fast Company magazine, argued in the Harvard Business Review, "There is more to long-term performance than the excellence of your individual players. ... Winning teams are more than just a collection of talented individuals."

Your organization's approach to talent acquisition is influenced by this debate. What side do you favor?

 

Commodity Pricing

Suppose it were true that some computer programmers are 100 times better than their peers in an absolute and measurable sense. Then, in a free market we would expect those superstars to command a salary 100 times their peers.

While this may sound ridiculous, it has established precedent in other fields. Top actors, musicians, athletes and lawyers command salaries that are hundreds of times those typical for their field.

There is no "war for talent" in those fields because scarcity is instantly resolved through pricing. For example, you can hire superstar singing talent such as Beyonce or Mariah Carey to perform at your private party, provided you are prepared to pay $1 million for their appearance.

In a free market, supply and demand are equalized through pricing, not through recruitment gimmicks.

The hard truth is that the labor market for programmers is a free market. And that market has determined the worth of top programming talent to be no more than two or three times the worth of a programmer at the lowest end, according to a Bureau of Labor Statistics comparison of the highest 10 percent of earners to the lowest 10 percent of earners.

Meanwhile, for singers and musicians it is 8 times and the multiple for professional athletes exceeds 10.

Of course, stories abound of technical workers who received stock options and other contingent incentives that brought their earnings into the millions. However, these incentives were not part of a guaranteed salary, but rather paid out only upon condition of meeting some criterion of success.

If star technical talent could reliably deliver high value to a company, wouldn't we expect the stars to negotiate their million-dollar salaries prior to the start of work?

After all, Beyonce's pay is negotiated prior to her appearance. Her pay is not contingent upon the level of audience enjoyment.

It suggests what most technical professionals already know -- success or failure in technical projects is largely due to factors outside of the control of employees, stars or not.

Searching for Bobby Fischer

Every organization wants excellent people. However, some business leaders insist that even excellence is not sufficient. They must have superstar talent if their grand strategic vision is to be realized.

Indeed, some people in history seem to have had a magical inspiration that could not be matched by others, no matter how competent. A thousand music majors do not make a Mozart.

Keep in mind, however, that many superstar talents were not even recognized in their lifetimes. If your corporate strategy depends on identifying and hiring such world-changing superstar talent, then you had better have a very long-term corporate strategy.

In the meantime, while you're waiting, you may want to explore what unexpected and amazing things your current competent staff can accomplish.

Context-Dependent Value

Perhaps you believe you already have your Mozart, and are just looking for talent who can keep up with him or her. In this case, you may want to ask what role this person is actually playing in your organization. Your Mozart may be an impediment to the productivity of the other talented individuals you are trying to attract and retain.

With all due respect to Zuckerberg and Andreessen for their entrepreneurial success, I gather from their biographies that neither one has spent much time on the receiving end of bad management. Or good management.

I have worked under both good management and bad management. I have been in situations where I was considered the guru, the knowledge-domain expert. In these environments, I soared through each day floating on air, and I was extremely productive.

I have also been in situations where I felt as if I could not tie my own shoes. All my efforts were met with resistance. My ideas were quickly dismissed. I dragged through the day, feeling I was the deadweight of the team.

 

In both cases, however, I was the same guy. Would Zuckerberg say that I am "100 times better" than myself? Or is it that the same person performs at different levels in different contexts?

In order to address this question, we must explore the term "corporate culture," which has been so overused that it has become trite. The term has been reduced to describing only the superficial aspects of the workplace: Jeans or business casual? Early-morning meetings or late nights with pizza and ping-pong tournaments?

In fact, corporate culture refers to something much deeper and more important. It is the inviolable sovereignty of the network of relationships that make up an organization. It is all of the accrued internal knowledge that a newcomer must learn in order to be productive in that environment.

It's not the transferable technical skills, but the specific lingo, terminology, abbreviations, implicit communication, unspoken assumptions, unstated processes, back doors, shortcuts, terrain of personalities and the real (but informal) power structure.

If your Mozart is one of the founders, then he is the nucleus around which the culture formed. Everything is aligned in the direction of his preferences and thinking processes because everything that did not align was rejected.

The team is, in some sense, an extension of him. With an entire team supporting the development of his vision, he can't help but be amazingly productive. He appears to others on the team as the resident genius.

The value of one's work is generally context-dependent. If employees are well-integrated into the culture, it is easy for them to be productive. But take them out of that context and put them into another organization where the culture is already established and they are unlikely to be as productive.

Worse, if the culture is closed to newcomers, then they are likely to flounder.

There are some tell-tale signs that indicate an overly enmeshed, Mozart-centered, closed culture. Such closed cultures often assert the same two cliches: "We have some of the smartest people in the world on this team" and "We have a very steep learning curve."

What disturbs me is that they make these claims proudly, without embarrassment. If they truly believe their people to be the smartest in the world, then they are underestimating their competitors. And, if they have such a steep learning curve that it has become a point of pride, then they are probably too closed to newcomers. They are denying newcomers the opportunity to contribute.

The Recruiter's Challenge

While you may not necessarily be looking for Mozart, you still want to attract the best candidates you can. However, your recruitment process may be hampering your search.

Recruiters for technical firms face an almost impossible task. We cannot expect the company recruiter to understand the needs of every different technical role in the company as well as keep up with the ever-changing landscape of technical skills. No one could.

Even full-time technical workers struggle to stay current and well-versed in their own fields. We can forgive recruiters, then, for being at times unsure of whether a given candidate could perform well in a highly technical role.

For example, the parallel between computer programming languages and natural human languages stops at their shared use of the word "language."

A person who is skilled in one programming language can fairly easily pick up another programming language. Thus, a person who is proficient in C/C++ can reasonably be expected to become proficient in Python or Ruby within about three months.

However, a person who is fluent in French will struggle as much as anyone to learn Japanese. Attaining fluency in Japanese takes years, and knowledge of French is of little advantage.

Therefore, a candidate with C/C++ on his or her resume could reasonably be a fit for a position that involves Python, while a candidate with "Fluent in French" on his or her resume cannot be expected to fill a role that requires fluency in Japanese.

Do your recruiters appreciate the difference? Is your candidate-assessment process flexible enough to allow for the natural variations and differing backgrounds of candidates?

Now, couple that with the problems common to online recruiting. As I wrote in my previous article, your online job-application software may be turning away talented candidates. Candidates may become frustrated with tedious, unclear or difficult application processes and abandon their application unfinished. Or, your automated applicant filtering tools may be discarding talented candidates.

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Try performing a diagnostic test on your application process. Create a fictitious resume for an ideal candidate. You can do this either by fabricating a resume to contain all the qualities you are looking for in a candidate.

Or, better yet, identify a superstar currently within your organization and use his or her resume. Change the personal details in a way that disguises the identity of the candidate, but does not change the substance of the resume.

Be sure the contact information channels all responses back to you, but not in a way that would be obvious to anyone on your recruitment team.

Now, using the fabricated resume, apply to your organization as if you are that fictitious ideal candidate. Take note of whether your application process is clear and easy, or tedious and difficult. See how long it takes for your recruitment team to contact you -- if at all.

A Bit of Common Sense

A job seeker with a strong quantitative background and stellar credentials recently applied to a large financial institution. He could not decide between two roles -- Statistical Analyst or Quantitative Modeling Engineer -- so he applied to both.

A few weeks later, a company recruiter contacted him and explained, "I can only put you in for one position at a time, and we have to consider carefully which one will give you the higher chance of success. Company policy is, if you're rejected for one position, you cannot re-apply to another for six months."

It seems unlikely that such a highly qualified candidate will still be looking for a job six months from now. The institution could very well allow this talent to slip through its fingers due to its own self-imposed policies. Clearly, there is no sense of urgency to attract and secure new talent.

You can interpret this in one of two ways: A financial institution that knows how to calculate risk and reward has evaluated the job market and concluded that quantitative talent is readily available. Or, the company is shooting itself in the foot and stands as a cautionary tale to the rest of us.

Either way, a little common sense will go a long way in acquiring the talent you need.

Demanding the Impossible

Are your job postings truly realistic? If not, talented candidates may be turned off without even applying. Many job postings have an impossible list of demands, such as proficiency in 10 programming languages, or five years of experience in a technology that has only existed for three years.

There is a cynical view common amongst technical workers that job postings are intentionally made impossible because they are actually cover for companies wishing to hire a foreign candidate.

According to U.S. immigration law, a company must first establish there is no eligible U.S. citizen who can fill the role before it can sponsor the visa of a foreign worker. If a company has a specific foreign worker it would like to hire, it can get around this rule by knowingly posting a job with an impossible list of requirements, and then "discovering" that there are no eligible U.S. citizens.

While this may not be your intent, be aware that savvy jobseekers will quickly skip past any job posting that seems to request the impossible. You can easily prevent this by paring the job requirements down to what you really, really want. Talented candidates will be much more responsive.

Some HR leaders misunderstand the impact of market projections and economics. If we read, for example, that demand for software development is growing by 3.7 percent annually, while the available pool of software developers is growing by only 2.8 percent, it sounds alarming.

However, before we become too concerned, we need to distinguish between two different phenomena: an unexpected supply shock and an anticipated supply shortfall.

If all the toilet paper in the world suddenly disappeared, there would be chaos. We use toilet paper, we need toilet paper and we assume it will always be available. We are unprepared for its sudden disappearance. History has shown us that major supply shocks can lead to social breakdown, including black markets, smuggling, price gouging, fraud, corruption, racketeering and even violence.

However, statistical projections that show anticipated demand gradually overtaking forecast supply is not in the same category. For one thing, it has not yet happened and may never occur. The mere awareness that supply could become tight is enough to make people change their behavior.

Most of the accommodation is quite mundane, taking the form of responding to changing prices. As with any commodity, as demand exceeds supply, the price rises. Companies find that they cannot afford as much as they want, and so they look for substitutes and replacements. Alternatively, they may discover that they can survive with less than they thought they needed.

Given fair warning, people and companies adapt before a shock can build up. Companies may find that some off-the-shelf solutions do the job nearly as well as customized products developed in-house. Or, perhaps companies will relax their overly rigid candidate requirements and discover that there are many more capable people available than they originally believed.

The rising price also attracts increased supply. Bright students who previously had little interest in pursuing technical careers will suddenly find those areas more attractive. Meanwhile, entrepreneurs will identify needs that are common across many companies and offer prepackaged solutions.

The mere awareness of a projected shortfall changes people's behavior and ensures that equilibrium is restored.

Gideon Litoff has more than eleven years of experience as a mathematician and algorithm developer in the aerospace industry. He holds an MBA with a focus on organizational dynamics from the University of California, San Diego. He also worked, for a brief moment, at a Silicon Valley startup. He can be reached at glitoff@yahoo.com

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