The previous post (https://bit.ly/3UrTkKa) was headlined Desperate times require desperate measures. When it comes to measuring the value of Talent, the opposite may be true, simply getting rid of the most expensive people may lose value in excess of the cost savings.
For metrics in Challenging Times let’s consider the simple impact of RIFs (Reduction in Force). Highly experienced workers generally have the most expensive domain knowledge and know-how talent. Many hedge-fund buyouts (“LBOs”) look to sharply reduce short-term operational costs represented by talent costs. (Twitter Layoffs for example) The ‘sharp reaction’ is to use the simple metric of cost to decide who to RIF (ignoring likely issues of ageism and related). The ‘value’ of talent is not taken seriously enough. The individual productivity of Talent is seen as almost a political favoritism rather than a time-weighted value to the enterprise.
R&D
Cutting research and development expenses are often cuts to talented staff. Instead of destroying the ongoing value of the staff, can a major chunk be redirected to customer-focused work for the duration of the challenging period? The talent development benefits of such an activity can’t be overstated. While the redirection isn’t always successful, RIFs can always be performed later. Its likely development work will be improved by closer customer interactions.
IT
Information technology talent is an ongoing cost in many enterprises. Newer demands for security, remote work infrastructure, and generational projects (e.g. moving to the cloud) have increased talent costs (employee or contractor) for years. Fattened budgets for BAD Projects (http://bit.ly/3OTO3tQ), infrastructure networks, and Internet-facing applications have expanded talent costs. The variation in talent productivity is very high in information technology positions and isn’t necessarily correlated with direct talent costs. The lack of correlation is due to wage-scale compression, historically high productivity (and crucial function support for systems of record), and industry fads. Short recommendation – The optimal cuts to information technology talent may not be in ‘the obvious’ areas and need to be done with a deeper look at value and contribution.
Operations
EkaLore has written how the senior expensive talent maintaining manufacturing production rates and revenues were seen as excess since their utilization wasn’t as high – a bad use of metrics when seen as the value of good production. Key talent is oftentimes seen as expensive (although long-term employees are likely under-compensated compared to the market) where their contribution to agility, resilience, and continued long-term enterprise stability is under-valued. A more difficult (political and operational) set of decisions look to a time-weighted and contribution-weighted and risk-rated view of talent. An action for management: review the talent in operating groups – who are the core cadre of talented people who are the greatest value for agility, resilience, and long-term enterprise stability? These are likely 10-15% of staff with outsize contributions or productivity. Do you even know who they are?
The Challenging Times series will continue. You can find it at www.ekalore.com/ARS or EkaLore regularly writes about Talent Management (The Hunt for Talent, BAD Project, Sales/Marketing Talent -www.ekalore.com/blog-1
Comments