Whether money can buy happiness may never acquire unanimous consensus -- but money can buy talented employees, which can make employers very happy. Employees -- especially the good ones -- don't come cheap, though. How much are you willing to spend in a world where toner has more longevity than the common employee? In his new book, Talent on Demand: Managing Talent in an Age of Uncertainty, Wharton School Professor Peter Cappelli addresses one of the most significant challenges a business must face: How to ensure that it will be you who reaps the benefits of your investment.
CRM magazine: What exactly is talent management?
Peter Cappelli: The simple definition is: What do we think our talent needs are going to be and [developing] some sort of plan to meet them.
CRM magazine: What problems are businesses facing now?
Cappelli: The increasing reluctance of employers to develop talent from within--and they're not crazy for not wanting to do it. If you've got an employer who's trained and developed you, competitors will say, "Great, we don't need to develop people, let's just go hire them from wherever." If you're the company that does that training, you're thinking, "Why should we be doing this?" It's not that employers are being irresponsible by not developing their employees; they just don't know how to do it within the economic framework.
CRM magazine: Managing a good workforce seems like Business 101. What was missing that inspired this book?
Cappelli: I had done some work about the breakdown of lifetime employment in these internal systems for developing people, promoting them, and advancing them. I was wondering what companies were doing now to address these questions compared to a generation ago and I started going to all these talent management conferences. I kept looking for something new and I couldn't find a single thing new. It was basically just repeated lessons and practices from a generation ago and also presenting them as if they were new ideas.
CRM magazine: Where, then, did you collect your insight?
Cappelli: From an unusual place. I wasn't learning anything from listening to what the U.S. companies were doing so I started to [look elsewhere]...and it turns out that the field of supply chain management has been dealing with exactly the same problems. [In a company,] you just substitute the word "people" for the word "parts."
And then I started to look around a little more. Frankly, listening to [U.S.] employers complain, we think we've got an unbelievably bad situation for employers. But it pales to the real talent crunches they're facing in India, China, and anywhere else in the world.
CRM magazine: [Younger people in the workforce] are told to switch frequently to increase job mobility. Whose fault is that?
Cappelli: It's clearly the employers who did it first. They dismantled these internal promotion-development systems about 15 to 20 years ago. They've more or less been hiring from the outside ever since. The generations coming along now are just responding to the realities of the world they see.
CRM magazine: How much more important does talent management become now that we're entering into a recession?
Cappelli: The single biggest thing to worry about is how to manage the uncertainty. It's not hard to meet your business needs if you don't care how much money you spend. A lot of best practice models are ones that are incredibly expensive, like job rotation. The big story that companies don't think about very carefully is the make-or-buy talent choice. Within the buying side of talent, there are a number of options for doing it, which come down to some trade-offs about uncertainty. The [trick] to this supply chain management approach is doing it without losing your shirt in the process.
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