Emerald Group Publishing Limited
Copyright © 2000, MCB UP Limited
Banking on top talent
Banking on top talent
Abstract How can companies compete for talent in a tight market? The author believes companies must learn to make the search for talent a strategic objective, as important as sales strategy or product development. Instead of simply handing the problem to HR or outsourcing it to executive search firms, CEOs and other senior executives should spearhead a continuous search for talent. Companies must market themselves to become "talent magnets," and broaden their horizons by looking for experienced executives in industries that are consolidating.
Keywords: Executives, Promotion, Succession planning, Internet, Unemployment
With US unemployment hovering just above 4 percent, talent is in short supply. Indeed, industries such as information technology now report negative unemployment rates. As many as 400,000 high-paying IT jobs nationwide currently go unfilled. The reason? A shortage of qualified candidates.
The shortage is even worse if your company is looking for top talent – senior executives with the ability to lead divisions or head corporate functions such as finance, sales and marketing, professional services, or strategy. Top-performing executives with the ability to transform a company, division, or business unit are in critically short supply in all industries. That, more than anything, explains the fabulous pay packages – replete with signing bonuses, stock options, and golden parachutes – being doled out daily to corporate superstars. Ask shareholders to rate the value of Lou Gerstner to IBM, Jack Welch to General Electric, or Lawrence Bossidy to Allied Signal, and they will tell you that acquiring top talent is the single most important ingredient of business success.
How can you transform your company's ability to identify and attract top talent? Here are four suggestions.
Look for crossover talent
Cast a wide net when searching for top talent. Look outside your industry. You might be surprised at what you will find. For example, look at the banking industry. In the past decade, consolidation has shrunk the number of commercial banks by 35 percent to fewer than 9,000 institutions. Within five years, fewer than 5,000 banks will remain, say experts. Top talent is streaming out of the banking industry. When large banks merge, experts in corporate finance, tax law, information systems, international trade, and community relations become available, as do vertical industry specialists skilled in serving global companies in areas like software, telecommunications, computers, real estate, manufacturing, and professional services.
Banking is a rich source of IT-savvy executive talent. Bankers addressed the year 2000 software crisis more rapidly and effectively than any group in the country. In answer to consolidation, they spearheaded the most complex systems-integration projects ever attempted – in some cases knitting together tens of thousands of incompatible computer systems and software applications. They pioneered customer-relationship-management applications on the World Wide Web. They launched innovative Internet banks, enabling customers to transfer funds, pay bills, apply for loans, and invest in securities – all in a highly secure but easy-to-use environment. Skills like these are needed in every industry.
...No matter how strong your internal candidates, it's important to continuously seed your company with fresh talent from outside.
By definition, superior talent is always in short supply. And yet companies like IBM, GE, and Allied Signal always seem to attract more than their fair share. Of course, the best and brightest want to work for a winner, and all of these companies are at the top of their game. But it wasn't always so. In the early 1990s, IBM was losing billions of dollars annually and Wall Street was calling for its breakup. Ten years ago, Allied Signal was mired in slow-growth industries. These companies executed brilliant turnarounds because they bet the business on top talent. The same kind of wager can work for you.