by John Boudreau, Ravin Jesuthasan and David Creelman
Should you hire as if your workforce will stay a month, a year, or their entire career? The answer makes a big difference in the qualifications you set, how well candidates must “fit” with the job, the team or the organizational culture, and the “deal” you offer. A traditional employment model may work for some, while a model based on short-term employment may work for others. At the extreme, it may be best never to “hire” your workers at all, or to “fire” and “hire” them several times. Leaders need solid principles to build talent strategies that fit the situation, with an optimization approach. Too often the necessary principles for optimization are lost in the chorus of divergent views and pithy examples. This chorus can also obscure the need to question long-held assumptions. Letting go of those assumptions may be the key to seeing new options that make optimization possible.
To see examples of the dilemma, you need look no further than this website and its Insight Center on Talent and the New World of Hiring. The website features a blog by Wharton labor economist Peter Cappelli, suggesting that U.S. companies return to the “Organization Man” model, right next an article by Reid Hoffman (cofounder of LinkedIn), Ben Casnocha and Chris Yeh, three entrepreneurs who say that the 20th century compact is gone, and instead recommend short-term “tours of duty.”
Cappelli states, “Is it time to bring back the Organization Man? In that model, which drove the US economy for most of the last century, employers made longer-term commitments to employees, where they invested in development to fill jobs, and where employees responded with commitments of their own in terms of performance. Jobs were filled internally with people prepared to do them, skill shortages were unknown, and employees were engaged with the needs of their employer,” and concludes, “what won’t work is pursuing this model half way, giving some employees some development opportunities but then still filling more senior vacancies from the outside. Why would someone wait around if it looks as though opportunity will not come?”
Hoffman and colleagues argue just as passionately that employment contracts should carry a short and defined endpoint (two to four years), “An employee who is networking energetically, keeping her LinkedIn profile up to date, and thinking about other opportunities is not a liability. In fact, such entrepreneurial, outward-oriented, forward-looking people are probably just what your company needs more of.” They imply that contracts could have different features for different employees and that encouraging employees to leave and return may be preferable to having them waiting around.
These are just two examples. They are widely divergent views, each punctuated by compelling examples, and each potentially optimal, but only for some situations. Of course, organizations need future skills and workers may desire predictability in their development. But fast-changing global product and labor markets can make it prohibitively risky for any organization or individual to try to see that far ahead. What will drive a more “optimal” decision framework?
It will require emancipation from fundamental assumptions, such as “employment” and “organization.”
“Employment” will not be the only way organizations engage people. You can already see this in internet-based labor brokers such as oDesk, which deconstruct projects into small components and match each component to a contractor who will never be employed by the organization. Crowdsourcing routinely gets work done by people who never even get paid, let alone become employees. Even when people do become “employees,” trends suggest shorter tenure, lower loyalty and employment “deals” designed to last just a few years. Once you rethink the idea of employment as the engagement model, the options for optimal hiring expand immensely.
The “organization” or “corporation” will not be the only collaboration model. Alumni networks allow rehiring former employees after they gain valuable experience in other organizations. InTransformative HR, we described Khazanah Nasional, a Malaysian Government investment body, which brokers well-structured “trades” of future leaders among companies, to build more well-rounded future leaders as a national resource. Also, the concept of an “organization” hardly applies to the community of video gamer volunteers that solved a riddle about the structure of the AIDS virus, which had eluded organizational R&D scientists.
We need a useful and lively debate about the future of hiring, and the future of work that it represents. No doubt optimal solutions will be as diverse as the Organization Man and Tours of Duty. Yet, the answer to optimized talent management requires more, including questioning assumptions. Savvy leaders will avoid being too quick to jump from one pithy example to another, and instead question assumptions to find
the solutions that will optimize their choices.
Originally published in http://blogs.hbr.org