In their seminal work The War for Talent, McKinsey and Co. coined a name for the latest battleground for seizing competitive advantage amongst companies, that of the acquisition and retention of the best talent available, through any means necessary. At the time, the Dotcom Bubble was in its growth stage, attracting any and everybody from the investment banks and the management consultancies to their small offices and big dreams. The bursting of the bubble has changed nothing, in effect, it has actually made the war for talent even worse. This erosion of the best and brightest from firms regarded as bastions of the best talent pools resulted in an unprecedented empowerment of talent, enabling a paradigm shift from loyalist to more mercenary tendencies, as well as throwing most conventional management theory into a tizzy.
The quest for competitive advantage has often been likened to a war without weapons, no holds barred and without mercy. In this vein, it is not uncommon to see managerial cadres within companies quoting military manuals like the Art of War and De Re Militari as a priest would the Bible. And this is where the War for Talent has confounded both theorists and practitioners. For each such work generally makes one assumption: that the army is loyal, and only the morale of the troops is to be maintained to ensure the highest performance on the field. No one anticipated such a scenario where the troops and in some cases, even the generals themselves, would desert the army for a more lucrative option on the side of a rival. Nothing reinforces this point more than the case of Shikha Sharma, who left ICICI to head Axis Bank in 2009 after losing out to Chanda Kochhar in the race to become the new MD of ICICI. While this particular case is an extreme, the migration of middle management from one firm to another, often taking their project teams with them, is a very real and proliferating problem, causing major losses to firms, especially in terms of investments on training of the fled talent.
It is for this reason that Human Resources, essentially a support department, is now undergoing a transition to Talent Management, a strategic form focusing on functional integration that is taking an increasingly prominent role in forming and, at times, even dictating competitive strategy for firms. But this is unfamiliar territory, with most managers left at a loss due to the absence of precedent, both in literature, as well as in practice, of tactics and methods that can achieve a significant degree of success in stemming this particular tide. Most are, as of now, improvising and, at the same time, putting more and more effort into research into suitable models and practices that can be adopted by firms in order to retain the best of their talent and simultaneously preventing an unnecessary bloating of organizational structures.
It is imperative, however, that in making this transition, firms do not forget the emphasis on the alignment with the company strategy, an emphasis that should serve to ensure that only the “right” people inhabit the firm, a classification that does not necessarily include the “best” available talent and should also result in a not insignificant streamlining of firms in terms of their human capital base. IBM, in particular, has gone a long way in developing a basic framework highlighting the various aspects of such a process, placing the maximum emphasis on “best-fit” practices, a method of managing the available talent pool by mapping them on a performance-potential curve, thus serving to objectively identify both the present as well as the future worth of the employee to the firm. This form of mapping also serves a dual purpose of determining the appropriate course of action the management, whether it be in the form of additional training, role switching, or simply an increase in the individual’s compensation.
Apart from this, firms are concentrating considerable effort, through conventional practices derived from extensive studies on organisational behaviour, on creating an environment and culture conducive to the the promotion and, more importantly, the retention of a highly efficient and satisfied talent pool.
Interestingly enough, the war for talent has had a fascinating side effect in the empowerment of the employee, putting them in a position, for the first time, to dictate terms to their superiors as well as creating a considerable reduction in the power of the employer over the “right” employee. Communism has long since been declared a failure but perhaps we are well on the way to achieving what one may consider a capitalist version of Marx’s Dictatorship of the Proletariat.
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