Rethinking the Future of Work #2
In which we fight the wrong war for talent
In part 1, we looked into capped rewards and the great decoupling between productivity and wage. Today, it’s all about talent.
Wanted: talent
We need you. Yes, you, with your particular set of skills and talents.
I bet you’ve seen heaps of job adverts similar to that. After all, there’s a war for talent. Right? Then again, all wars are the result of human stupidity.
The phrase 'war for talent' was invented by McKinsey & Co in 1997 in a report that bemoaned the lack of talented managers. Guess what McKinsey does? Help companies hire managers. Classic marketing scheme: create a scarcity that does not exist. The non-existent war for talent was born.
The top executives were worth their exuberant wages, McKinsey suggested, because their ‘talent’ is scarce, and if we don't pay that wage, they will start working for the competition. Leading companies perpetuated the myth because - of course - they had the most talent on board.
Oddly enough, it’s often those (self-proclaimed?) top talents that get caught embezzling company money, evading taxes, side-stepping health and safety issues, and screwing the company’s clients. When they’re found out, they’re fired… and quickly offered another job with a disgustingly high salary. 2008 banking crisis, anyone?
Of course, there are shortages in the labor market. Not among managers, though, but among healthcare professionals, social workers, teachers… Jobs that are not nearly paid as much as they should be considering the contribution they make to society. And let’s not forget that most countries in the Western world are characterized by demographic pyramids that are showing cracks. Below is the general one for Western Europe, for example. When all those 50-year-olds will retire, an ever smaller proportion of people will have to do all the work.
We can’t keep doing what we’re doing, and that includes our current conception of what ‘work’ is and means.
Man of steel
But, maybe I'm biased.
So let's steelman the counterargument: suppose there truly is a war for executive talent. If that would be the case, it's a war we have collectively lost.
In 2001, Prof. Jeffrey Pfeffer warned about pursuing 'talent' at all costs.
Companies that adopt a talent war mind set often wind up venerating outsiders and downplaying the talent already inside the company, set up competitive, zero sum dynamics that makes internal learning and knowledge transfer difficult, activate the self-fulfilling prophecy in the wrong direction, and create an attitude of arrogance instead of an attitude of wisdom.
Key point: culture beats talent for organizational success. Likewise, a 2021 critical review suggests that focusing on 'talent' is not the best choice for organizational justice, ethics, internal competition, and workplace diversity.
A 2020 Gallup poll adds some quantitative evidence: 82% of companies that specifically hire 'managerial talent' miss the mark and notice little to no improvement after the hire.
The same Jeffrey Pfeffer we met earlier wrote a book in 2006 about evidence-based management with Robert Sutton. In it, they challenge three key assumptions that underlie the ‘war on talent:
Individual ability is largely fixed and invariant.
People can be reliably sorted on their abilities and competence.
Organizational performance is the simple aggregation of individual performances.
As you can guess, I think all three of those are nonsense.
In 2009, hot on the heels of the financial crisis, this paper suggested that:
…the dominant approaches to the ‘talent war’ based on a scarcity state of mind and action, often characterized by a tactical and exclusive top talent or ‘star’ focus, are being challenged by the emergence of a more evolutionary paradigm. This new paradigm adopts more strategic, innovative, cooperative, and generative approaches which we describe as creative ‘talent solutions’.
Of course, managing a team requires certain skills and (perhaps) personality traits (probably different ones than you think, go introverts). But it’s not the manager who determines the success of a team or department. A great manager safeguards an environment in which each person can develop their own job-related skills and - yes - talents. Talent shows itself when the conditions are right.
There is no lack of talent; there is a lack of companies with a culture that allows talent to thrive.