Be prepared for the biggest revolution in staffing of this century! Let’s face it, employers have had the upper hand in the employment relationship for a long time. But that is all about to change. The Internet and the e-commerce model are about to shift the balance of “power” toward the employees with the advent of on-line bidding for talent! GET READY TO BID FOR TALENT We all have heard about the success of the e-bay and amazon.com auction sites for merchandise. As the “e-commerce” model expands, the next step will be to “bid” for human talent. Some firms have been “shopping talent” to companies for years while others are relative newcomers (or soon to be’s). Several firms have been cited on the Internet as possible players in the coming bid for talent market. They include www.ebay.com, www.talentmarket.com, monster.com, www.priceline.com. Most bid firms and sites now focus on contractors and “free agent consultants” but the trend is inevitable. The next step will be the bidding for people that are currently employed. WHY THIS TREND? There are a variety of causes for this trend. They include:
- A low unemployment rate means that there is a shortage of available talent and those people with jobs are more willing to “test the market” knowing they now have multiple options.
- More and more people are working as independent contractors and consultants (Over 8 million at last count).
- More employees and households have access to the Internet and people are becoming more comfortable buying and selling on the web.
- The relative success of other types of auctions has spurred an expansion of the use of auctions into the human talent area.
WHAT DOES IT MEAN TO RECRUITERS? Recruiters can lament about how dehumanizing it is to bid for people but that isn’t going to prepare you and your firm for the “bid for talent war.” By observing what happened in the sports and the entertainment industry in past decades when their “employees” became free agents you will learn that the percentage of all expenses going to salaries may increase by 25%. Some individual salaries will double and triple as instant “market forces” replaces the current “inefficient” process. And since there is no “salary cap” in the business world, be prepared for profit margins to tumble! As in sports, the value of “top” talent will soar much higher while the cost and value of average talent will go up significantly less. Employee loyalty, which is already at an all time low, will weaken further, just as it has in professional sports. In addition, if bidding becomes widespread, turnover rates will skyrocket and employees that become the slightest bit dissatisfied will be able to find out their “real worth” over night. If you want to prepare for the bid for talent revolution, here are some suggestions on what you need to do:
- Do an assessment of your current talent to see who might be “at risk” of leaving due to low pay. Involve compensation experts, headhunters and in-house recruiters in the assessment process.
- Develop (or revisit) a counter offer policy. Fight the tendency to refuse to make counter offers. Set dollar ranges for counteroffers in each of your different key positions.
- Prepare a “bid strategy” for your firm. Develop bid site assessment criteria and train your managers and recruiters in how and when to bid for talent.
- Reassess your consultant and contractor policy. As independent talent becomes easier to find, firms may decide to increase the usage of temporary experts in lieu of regular employees.
- Revise your recruiting budget and shift resources from finding talent (which will be much easier) toward paying for it and convincing talent to take your offer over the many others a candidate may now get.
- “Re-recruit” your key talent and improve their current job before others do it for you.
- Identify which key positions you have that are “hard to fill.” Increase your retention efforts for people in those positions.
- Be prepared to continually (constantly) reassess the pay of your key people. Reassess “equity” policies and goals because giving counter offers to some will certainly cause others to feel slighted.
- Identify what you would be willing to pay (bid) for new talent.
- Identify those employees that are likely to enter the independent consulting field.
- Search “bid sites” and the Internet to see which of your employees might be actively looking for a job.
- Require managers to have a “backfill” person prepared in the event someone does leave.
- Train and educate your recruiters and managers in the “new realities” of the bid revolution.
WHAT DOES IT ALL MEAN? Finding talent will become easier as the volume of bidding for talent increases but the price you pay for it will be significantly higher. Old recruiting tools and strategies will need to be revised either to minimize the impact of this trend on the firm or to take advantage of this new tool. Firms have always informally “bid” for talent for their new hires with multiple offers. It has just been a slower process and the bids were generally only between one or two other firms. Now the bid process will be widespread. Executive search firms are also likely to add a bid element to their product line for the top candidates in their databases. Recruiters and staffing functions that are prepared for this revolution will be able to give their firms a competitive advantage…just like the NY Yankees and others have done in sports. Let the bidding begin!