Fire, Hire, Grow and Keep

February 17, 2008 by
Filed under: Leadership, People 

In this neck of the woods, there appears to be a real shortage of tech labor. The local industry association is citing the demand for new talent to be around 15%, and job postings on local boards are soaring. I expect this situation is repeated almost anywhere these days, and we are in the midst of a heyday for recruiters. Are we doing everything we can?

I’m not so sure. The emphasis appears to be on finding new talent and competing successfully against others to hire this new talent. Unfortunately, if everyone else is doing the same thing, we fall into that zero-sum trap again. If we have won at finding a great resource, someone else has lost. Whenever someone has offered a better compensation package, we feel we have lost. While it can be important to seek new talent to fill gaps with our resource needs – to bring in unique expertise or experience in a niche that we are expanding into – we rarely differentiate this from the situation where we are looking to add more resources that look a lot like what we have already.

That same industry association study that indicated a local talent gap of 15% cited that on average, 1.37% of salaries are used for training, and that more than 50% of respondents only allocate 2% of salary for training at all. We hire in the best we can find, don’t spend a lot of time nurturing them once they are here, and find ourselves in a vicious circle when these talented people leave for greener pastures. The grow and keep portions of the overall talent equation are woefully neglected. While it is important to understand how to find and recruit new resources (and local technology associations can do a great job here), we need to get a whole lot better at nurturing the team we have, which in turn will help us retain them.

Here come those stats again. In software companies, stats show an average of 30-40% of time spent in rework (I’ve measured it with one company locally to be over 70%, and anecdotally, many others feel it to be 50% or more). Unfortunately, almost nobody measures this, making it an underlying malaise that’s not top of mind when we try to figure out how to get more work done. It’s safe to say that startups that are usually at the higher end of this waste – running hard and cutting the wrong corners. If we don’t know the numbers, if we can’t see this massive pit of costs, we also can’t see it as an opportunity, either.

For astute companies, greater emphasis on training and operational oversight can easily reap that 15% additional resources that are cited in the study above. What is most important about this approach, the grow and keep approach, is that companies that work this way extract themselves from much of the zero-sum talent battle, and dramatically reduce the risk and cost associated with recruiting. It’s not completely eliminated, but becomes important only when we are looking for different and unique talent, not for more of what we already have. If we are simply looking for greater capacity in development or testing or management, in a generic sense, we should first look to improve internal efficiencies rather than throwing new and untested people into the talent pool.

It is important to attract more talent to the region (which is probably true wherever you live), and tech associations can provide quite a boost here. As individual businesses, though, getting better with the talent we have is something that is entirely within our control, and is more likely to bear the fruit we need to thrive. Wherever possible, grow and keep should be emphasized over find and hire. – JB


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