Rethinking the ‘War for Talent’

The departure of talented employees can actually benefit a company, depending on where those individuals are hired. Therefore organizations must learn how to lose certain battles in order to win the war.

Despite the earnest efforts of many executives to win the so-called war for talent, employee mobility remains a fact of life. According to a recent survey, from the beginning of 2005 to the end of 2006, companies lost nearly 30% of their human capital.1 What are managers to do? The traditional solution has been to focus on strengthening employee-retention programs in order to curb worker turnover. But although such efforts might produce limited gains, they do not address the broader issues driving employee mobility. Instead, a more innovative approach is needed. Our research suggests that companies might benefit from developing new strategies that, instead of focusing on suppressing employee mobility, actively seek to exploit the potential opportunities it creates.2 (For an overview of our research, see “About the Research“) For such approaches to succeed, however, managers must rethink some of their basic assumptions about the “war for talent.”

About the Research »

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References

1. Society for Human Resource Management, “SHRM Human Capital Benchmarking Study” (Alexandria, VA, 2007).

2. D. Somaya, I.O. Williamson and N. Lorinkova, “Gone but Not Lost: The Different Performance Impacts of Employee Mobility Between Cooperators Versus Competitors,” Academy of Management Journal (in press).

3. J. Nahapiet and S. Ghoshal, “Social Capital, Intellectual Capital and the Organizational Advantage,” Academy of Management Review 23, no. 2 (1998): 242–266.

4. M. Santoli, “Minting Money the Goldman Sachs Way,” Barron’s 86, no. 15 (2006): 22.

5. L. Rich, “Don’t Be a Stranger: Alumni Programs Are a Great Way to Stay in Touch and Boost Business,” Inc., (January 2005): 32.

6. T. Gardner, “Interfirm Competition for Human Resources: Evidence From the Software Industry,” Academy of Management Journal 48, no. 2 (2005): 237–256.

7. K.J. Delaney, “Microsoft Wins Small Battle in Google Suit,” Wall Street Journal, July 29, 2005.

8. J. Glückler, “A Relational Assessment of International Market Entry in Management Consulting,” Journal of Economic Geography 6, no. 3 (2006): 369–393.

9. E. Zimmerman, “The Boom in Boomerangs,” Workforce Management Online, January 2006, www.workforce.com/section/06/feature/24/25/79/ index.html.

10. P. Weaver, “Tap Ex-Employees’ Recruitment Potential,” HR Magazine 51, no. 7 (2006): 89–91.

Acknowledgments

The authors would like to acknowledge the contributions of Natasha Lorinkova and the support of research grants from the Intellectual Property Research Institute of Australia (IPRIA) and the Robert H. Smith School of Business.