Talent Rebounds- The True Cost of Cutting Salaries and Low-Balling Candidates

Well, ’tis the season and it seems as though we have a recovery in our midst.
The job market is picking up and it appears that we have a back lash creeping up upon us.

Employers beware, if you hired people between January 2009 to present, or if you retained people over this time. If you hired and offered people less than their asking rate or if you cut bonuses or cut salaries to meet budget ……if you cut or compromised in any way, you are sure to have a new challenge on your plates in 2010-you know it well, it’s called “RETENTION”

Our employment rates are starting to increase, agencies like ours are getting busier, and the job boards are seeing an increase in postings, and guess what? Alas! We have a taste of an old cycle on our hands. Remember “The War on Talent” before ‘08…how about 2010 and “The Storm of Talent Rebounding”

What does this look like? Loss of talent. People leaving for better jobs, better vacations, better locations, more senior roles, and overall, better opportunities.

You know that top developer you hired but gave him 7k less than he asked for, the one who asked for 4 weeks vacation and you gave him 3….well he’s likely still looking…better yet, he has probably just resigned.

What about that hard to find Ad Operations Supervisor, the one who increased revenues 300% this year. I can tell you he kept his recruitment networks open, and though it seemed right to offer him the same salary he had, because he only had 3 years experience and you had to stay within approved bands, after all, he should be lucky to have a job right? I know, it seemed fair at the time. But fair isn’t smart. I can also tell you, that there are a few clever recruiters out there who are keeping an eye out for him…If I were you I would be thinking about offering him a retention bonus and a paid week’s extra vacation.

How about the Sr Director who took a cut to join your organization? The one who had the perfect mix of skills ranging from legacy to VMware, who you hoped would join despite your salary restrictions? Well, good news is, you hired a super star but; she took 15k less than she was earning before. Now the fun begins. She is a hard worker; her 12 hour days and turn around initiatives have blown business units away. What have you done to keep her? Recognition at a town hall may keep her smiling today, but she is wondering how to go about getting a raise and has already made a few calls. You know she is open to recruiters’ calls and keeping her network warm. Be prepared, and be smart, get that woman a review with a Sr. VP, and put some pay increases in place and give her some quarterly incentives, offer her some perks and let her know what you are going to do for her in 2010.

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Good Will factors in too, if 10 people leave because they were unhappy, you can be sure 20 people they are connected to have been made aware of your organization’s short fall. That leads to poor employer branding, and that leads to talent acquisition challenges.

And then what happens? The War on Talent returns.

So, hiring managers and HR professionals; please get smart. Take care of your talent from the day you build that job description. Think about the long term benefits of keeping and retaining top talent. Think of the bottom line benefits of having an organization that employs best- in- class people. Think of the brand you can build as being a top employer. Think of how a culture of happy, engaged and productive people can impact bottom line and your company’s survival.

I have always admired this clip and thought I would share it with you-it talks about Netflix and their cutting edge approach to building culture and cultivating success

Here’s to 2010 and building your best practices ever in the New Year.

CJ