The War for Talent Will Be Back

I had three different lunch meetings last week with three friends of mine.One is a headhunter, one is a management consultant, and the other is aninvestment banker. No, this is not one of those jokes about a priest, aminister, and a rabbi or a doctor, lawyer, and accountant.

    The headhunter had just started his own boutique firm because his former firmwent bankrupt. The management consultant’s firm had been cut in half over thepast year to avoid bankruptcy. The banker had just been laid off from hisM&A job when his employer jettisoned his entire unit. Indeed, the dot-comdays are over.

    In each conversation, we talked about what was next. The headhunter, a man inhis early 50s, bitter about his current station, scoffed at my remark that thetalent game was not going away, especially given the aging of our workforce. “Kid,”he said, “the War for Talent is over. It is now a Struggle for Security. Thisis a good lesson for you and your generation. It should teach you somethingabout loyalty.”

    My friend the consultant used to do studies about the cost of turnover forfirms when their talent left for start-ups during the Internet gold rush a fewyears ago. He noted that we now have “a waiting game.” He added, “Whilefirms are holding on to their employees with much greater effectiveness, youhave masses of young talent just waiting to jump. They see their friends gettinglaid off and they don’t like it.”

    He also described how “employers are behaving with a lack of dignitycomparable to that exhibited by the 20-somethings when they demanded truckloadsof options and massive compensation in the mid-1990s.” Now in his late 20s, heis already planning his next move after the market recovers.

    The conversation with the banker was perhaps the most sobering. “Forget it,”he said. He saved enough of his huge bonuses over the past three years to allowhim to “just wait it out.” He noted that it made no sense to jump back intoa job market that would pay him half of what he used to get paid to do work henever liked in the first place. “We were all mercenaries; there is an impliedcontract in banking, and when the market comes back, I will jump back in. Untilthen, I am going to play guitar and hang out. But I would love to see the bankburn in the interim.” He looked the happiest he had been in five years.

    So where does this leave us? Indeed, my headhunter friend was right that thepast three years have been a very difficult experience for a generation that haspretty much known nothing but economic prosperity. At the same time, while itmay no longer be in vogue to pronounce that “the Internet has changedeverything,” I do know that my friends the consultant and the banker areplaying under a new employment dynamic, born in the 1990s. The trust and esteemthat employers are afforded today is equivalent to the amount of loyalty theyengendered during the last market boom.

    When the market turns, my friend the consultant will be on to something new,either in industry or a new venture. My friend the banker will have no illusionsthat his next banking stint will be measured in months, not years. Employersshould show the wisdom of their years and forgive the arrogance andrighteousness exhibited by younger employees during the Internet boom and planfor the long term. When the market turns, finding a way to achieve détente inthe next War for Talent may serve them well.

Workforce Online, February 2003 — Register Now!